Life insurance annually?

chelseablue

Hi all


I have been getting some quotes for life insurance and I notice that on the comparison sites it just gives a monthly figure with no option of an annual payment.


Is it possible to pay for life insurance annually?

Aretnap

Life insurance is a product which you buy for the long term rather than one where you buy a new policy every year, so monthly payments are the norm - much like with your phone or broadband contract.

I suppose it might be possible to find a provider who would let you make annual payments rather than monthly ones, but I can't imagine there'd be any advantage in doing so - it wouldn't result in a significant discount.

chelseablue

Thank you - does that mean you don't shop around every year? You have to stick with the first provider you sign up with?

dunstonh

Yes. you can pay annually or even single premium in some cases. Not all plans offer it but it is available. From memory (as it has been a long time since I looked), I don't believe monthly or annual gave any cost differences.

The online comparison sites tend to simplify the options available and cut many of them out from what are actually available. So, I suspect that is what is happening there.

Thank you - does that mean you don't shop around every year? You have to stick with the first provider you sign up with?

Life assurance is a long term contract. It is not annually renewable. (although technically, that is possible but rarely viable).

Aretnap

chelseablue wrote: »

Thank you - does that mean you don't shop around every year? You have to stick with the first provider you sign up with?

You can change if you want to but there is typically not much advantage in doing so - life insurance generally gets more expensive as you get older, especially if your health has taken a turn for the worse.

A life insurance policy typically lasts a long time - you pick a "term length" which will cover you if you die before, say, your mortgage is paid off, or until your children are be old enough to look after themselves. The price is based on your state of health at the start of the policy and the length for which it's going to run, and the policy pays out if you die before the term date (and if you're still alive on the term date then it doesn't pay out at all).

It would be theoretically possible to have a policy with a one year term date and to shop around annually, like you do with car insurance, but you really don't want to do it like that. If you got a serious illness (say cancer) then when your "renewal" date came through you'd find that you were unable to get a new policy for next year - leaving you without life insurance just when you leave it most.

So while there's no harm in looking around occasionally (especially if you're still in good health) to see if the market has changed and if you can get cover cheaper by changing provider, you should expect to keep the same policy going for as long as you need life insurance.

chelseablue

Thank you all, I was just looking at the Legal & General website and you can pay annually with them, although don't know how competitive they are.


Its not actually for me its for my partner


Mine is through my employer, who pay out 8 x my salary if I die, obviously if I changed jobs I might have to set up my own policy

Weighty1

As you've found, you can pay the premium annually. Normally, depending on the size of the premium, the saving is only equivalent to ~£2/month. Also, if you ever want to change/cancel the plan the fact that you've paid for a full year would mean you may waste part of a year and therefore the saving is diminished.

In regards to your cover, I normally advise my client to discount any death in service provisions. One big problem that can arise is that they are not contractually guaranteed so your employer can stop offering them. Also, if you ever fall long term ill which results in you giving up work you are suddenly left without cover at a time when it could be very difficult to arrange new cover. Just my tuppence worth.