How to buy life insurance Cut the cost of life insurance
Cashback websites and online brokers can help you cut the cost of life insurance
If you're not sure what sort of life insurance policy is best for you, or how much cover you need, it's worth speaking to an independent financial adviser (IFA). Specialist IFAs like Lifesearch and Lifeassureonline are good places to start. However, if you decide to buy a policy online, our tips below can help you save cash.
Shop around for life insurance
It's not just banks, building societies and insurers that sell life insurance nowadays. High street retailers and supermarkets are also worth considering. Quite often one company sells another's life insurance policies - for example, Nationwide Building Society sells Legal & General life insurance policies, while Virgin Money sells Friends Provident policies. The price you'll pay will vary depending where you buy it, even where the underlying product is identical and is provided by the same insurer.
Online life insurance brokers
Online insurance brokers, such as Godirect.co.uk can often offer cheaper prices as they pay back to you some or all of the commission they receive from insurers.
It's also worth getting quotes from Cavendish Online - it works on a different basis to other brokers, offering a choice of paying by commission or through an upfront £35 fee when you take out a policy. In the latter case, the company rebates you all the commission throughout the term, reducing the ongoing premium. It's worth checking the overall cost of both options.
When we've tested online brokers and price comparison sites in the past, they've both provided very competitive quotes.
Price comparison sites
One of the best ways to compare different life insurance providers is to use a price comparison website like Moneysupermarket.com, Comparethemarket.com or Confused.com. Make sure you visit a selection of sites as no individual site covers the whole market, and the same insurer may offer a better deal through one comparison site compared with the others.
- For more, read the Which? guide to Price comparison sites.
Cashback websites
If you buy life insurance online, cashback sites such as Quidco and Topcashback can help you get an even better deal. You're not buying the insurance policy from the cashback site, but rather accessing the insurer's own website through the cashback site. The cashback site rebates to you some of the commission it receives from the company selling the insurance.
Voucher and cashback deals only work if the initial quote itself is at or near the top of the table. For example, a policy charging a premium of £50 a month for 10 years and offering £100 cashback will still cost you much more over the policy term than a similar policy costing £40 a month with no initial cashback deal.
It's also worth checking a selection of cashback websites as cashback offers vary widely. For example, the same insurer might offer £20 cashback through site A, £40 cashback through site B and a £50 high street voucher through site C.
- Read the Which? guide to cashback websites.
Want to buy life insurance direct?
If you don't want to trawl through price comparison sites and cashbacks sites to find the best deal, we've rounded up some of the best direct deals in the tables below. If you can spare the time, though, it's worth seeing if a cashback site or a price comparison site can beat thse offers.
| Level - term insurance £100,000 cover | |||||
|---|---|---|---|---|---|
| Category | Company | Premium | |||
| 10 Year Term | |||||
| Male smoker aged 54 | Aegon | £56.60 | |||
| Aviva | £57.30 | ||||
| AA | £58.68 | ||||
| Average premium | £69.73 | ||||
| Male non-smoker aged 54 | Aegon | £25.20 | |||
| LV= | £25.28 | ||||
| Aviva | £25.30 | ||||
| Average premium | £32.14 | ||||
| Female smoker aged 54 | Saga | £49.05 | |||
| Sainsbury's Finance [a] | £49.05 | ||||
| Legal & General [b] | £49.55 | ||||
| Average premium | £55.21 | ||||
| Female non-smoker aged 54 | Saga | £28.80 | |||
| Sainsbury's Finance [a] | £20.80 | ||||
| Aviva | £21.00 | ||||
| Average premium | £24.96 | ||||
| 25 Year Term | |||||
| Male smoker aged 39 | Aegon | £21.30 | |||
| Aviva | £21.40 | ||||
| Zurich | £22.00 | ||||
| Average premium | £26.67 | ||||
| Male non-smoker aged 39 | Sainsbury's Finance [a] | £11.34 | |||
| Zurich | £11.40 | ||||
| Legal and General [b] | £11.45 | ||||
| Average premium | £13.65 | ||||
| Female smoker aged 39 | Aegon | £17.30 | |||
| Aviva | £17.40 | ||||
| Zurich | £18.10 | ||||
| Average premium | £21.08 | ||||
| Female non-smoker aged 39 | Aviva | £9.20 | |||
| Sainsbury's Finance [a] | £9.36 | ||||
| Legal and General [b] | £9.45 | ||||
| Average premium | £10.90 | ||||
Table notes
a) Online rates
b) Rates available directly from L&G or via an IFA if applied for electronically
The table shows the lowest monthly premiums available as of May 2012 for level term policies paying £100,000 cover. All premiums are guaranteed.
- Need help choosing the right life insurance policy for you? - call the Which? Money Helpline
- Minimise your estate's inheritance tax bill - read our comprehensive guide to IHT
- Have you considered your other protection needs? - read our guide Understanding protection insurance
