Shopping around for life insurance pays off - survey

Consumers can save from €8 to €27 a month on life insurance costs according to the details of a survey published yesterday.

The Irish Financial Services Regulatory Authority's (IFSRA) Life Insurance Cost Survey shows that consumers can get a better deal by shopping around.

The survey looks at the premiums paid by men and women, both smokers and non-smokers, aged 26, 36 and 46, to 10 different financial institutions operating in the Republic.

It examined the monthly cost of €200,000 worth of cover over 20 years as its model. However, the premiums paid provided cover for a wide range of sums above this figure.

The results reflected the well-established fact that smokers pay more for life cover than non-smokers, as they are a higher risk. Similarly, men pay more than women, as insurers say that the facts show that they are more at risk.

But the study shows that consumers can exploit a wide difference in charges between the 10 insurers.

The cheapest cover costs €10 a month for a 26-year-old female non-smoker, charged by Eagle Star for a policy worth €238,335.

The most expensive cover recorded in the survey is €136.52 a month for a 46-year-old male smoker, charged by Quinn Life, although that is for a policy that pays €339,500.

However, there are notable gaps within the charges. For example, Irish Life charges the 26-year-old non-smoking woman €20, albeit for cover of €431,009.

In this age group, Irish Life charges the same rate to male non-smokers and all women, irrespective of whether or not they are smokers.

Male smokers in this age group pay €23.25 a month to Canada Life for a policy worth €223,791, compared with €18.75 to Eagle Star for one worth €238,335, a difference of €1,080 over 20 years.

The differences narrow in the 36-year-old bracket. Irish Life is the most expensive for male non-smokers with €27.21, while Caledonian Life is the cheapest with €21.83, for cover worth €293,421.

Premiums for female non-smokers vary by less than €4, with Irish Life being the most expensive at €21.25.

The gap widens considerably in the 46-year-old bracket. Quinn Life, which provides cover for €339,500, is the most expensive across all four groups in this category.

It charges female smokers €96.08 a month, €27.02 more than New Ireland, a difference of over €6,000 over 20 years.

The survey also assesses mortgage protection costs. This insures the lender's principal in case of the borrower's death within the duration of the mortgage.

All financial institutions demand it as a condition of financing house purchases.

The IFSRA data show that AIB subsidiary Ark Life charges €15.13 a month to 31-year-old male non-smokers for cover worth €203,000, compared to Eagle Star's premium of €10.39 for €205,897.

Ark Life is one of the more expensive mortgage protection providers across the categories included in the survey. It charges 23-year-old male smokers €25.18 for a €250,000 policy over 25 years, compared to Eagle Star's €16.20, a difference of almost €9 a month or €2,694 over 25 years.

Bank of Ireland-owned New Ireland is the most expensive provider of mortgage protection for 43-year-old male non-smokers, charging €19.86 a-month for €150,000 over 15 years, compared with Friends First's charge of €16.80, a difference of €550 across the policy's life. It is also the most expensive in this age category for females.

With one exception, the survey shows Irish Life to be the most expensive across all categories for serious illness cover - which assessed the monthly cost of a €200,000 policy across 20 years.