Life insurance policies 'staggeringly different'

Britons holding life insurance policies with higher end insurers pay over two thirds more than people who have taken more competitive policies, according to a new life insurance index.

Data from Sainsbury’s Bank life insurance index shows that customers with competitively priced term assurance policies pay 66.24 per cent less than Brits with the expensive insurers, a difference which comes to as much as £8.36 a month.

And, although average monthly premiums dropped between September 2006 and March 2007, the difference between the most expensive and the most competitive policies has increased by over one per cent.

Last year the average monthly life insurance premium was £16.11, but that has dropped to £15.87, however the difference between cheapest and priciest has grown from £8.31 to £8.36.

Sainsbury’s Bank calculates that over 25 years the customer with the cheaper policy would pay £2,508 less than their higher paying counterpart.

Claire Moyles, the bank’s life insurance manager said: "Although we appreciate our index is not indicative of the life insurance market as a whole, we believe it should serve as a useful reminder to people of the need to shop around."

Brits have also been told that as well as shopping around, making healthy lifestyle choices such as cutting down smoking could reduce premiums.

Meanwhile, Tesco have announced that Britons who request a quote by August 14th and then buy the policy will be given three months’ worth of cash back, or a quarter of their annual premium.