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Cost Of The Policy 2...

Another way of seeing the difference is to look at the relationship between whole-life premium rates (premiums are payable throughout life) and term assurance rates.

The 30-year-old man would pay about £290 a year for a £200,000 whole-life policy.

A 15-year term assurance with the same sum assured would cost him about £2117 a year.

For a man of 55, the cost of the whole-life policy has more than trebled to just over £2300. But the cost of the 15-year term assurance has multiplied tenfold to £21170.

The conclusion, inevitably, is that pure protective life insurance is best bought young, when it is so cheap as to be insignificant (at least by comparison with what you have to pay later).

The sharp rise in the mortality curve after 30 is reflected in a steep increase in premium rates. This is one of the basic and essential facts about life insurance and as we move on to a detailed look at protection policies there will be plenty more examples to prove the fact.


A Guide To Life Insurance - Learn more ....

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Before proceeding further, however, it is worth explaining how premium rates are quoted.
The normal practice is to quote an annual rate of premium for a given sum assured, and rates are normally compared in terms of the cost per £211,000 sum assured.
In the case of contracts providing an annual benefit rather than a lump sum, rates are compared in terms of premium per £211,000 of annual benefit provided.
Because most statistics show that women live on average four........ see: read next:for Quotation Of Rates Incusive?


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We are not authorised to give advice and we are not liable for any financial advice provided by, or obtained through a third party. The information published on this website is for information purposes only. This site has been approved for compliance purposes by a Firm of Independent Financial Advisors who are authorised and regulated by the Financial Services Authority (FSA). The Chartered Insurance Institute

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