It would be relatively easy to name the top 10 or 20 best known providers of life-insurance (also known as life assurance) in the UK. However, that doesn’t necessarily mean they are the best or even provide the most suitable policies for prospective customers.
The Most Important Factors
There are many factors that can affect the provision of the most appropriate type of policy that is best suited to the individual and their family. The most important factors are:
- Age at policy inception
- Single or joint policy
- Policy term
- Type: level or decreasing over time or whole of life
- Amount of cover
- Amount of lump sum payable on death
- If a regular income is required
- General health condition
- Level of discount for a non smoker
- Are there exclusions?
- Does participating in certain sports nullify the policy?
- Is travel to certain countries excluded?
- Early payout and its level in case of terminal illness
- Are the premiums fixed for the term?
- How much is paid by the insurer to any broker or middleman?
It is always difficult to compare different policies from the big providers, as the main differences are usually in the small print that unfortunately nobody reads when taking out such an important cover over a long period, usually 10 to 30 years.
Another important question as part of a financial health check would be the reason(s) for seeking life insurance, as many people find that they may be under or over insured.
Life Policy Risks
Life policies went through a period where many providers increased their premiums due to HIV and AIDS. It was the actuaries that made products so costly, as they were over cautious in their statistical analysis. This resulted in the premiums remaining high for more years than was necessary and as a result many people were put off taking out life policies. The premiums were eventually reduced to realistic levels, as the HIV factor was seen as minor for most heterosexual applicants.
The life insurance market then went through a rapid expansion due to the reduced premiums as a result of the massively reduced risk for the providers and availability of a host of online comparison websites. These sites have continued to provide a good platform for the largest providers to increase their share of the life insurance market.
The Main Players
There are firms that specialise in life insurance and others that are general insurers with a life division. There are also some providers that remain a mutual society owned by their policy holding members.
These specialise in all types of life insurance, annuities and pension provision. It is always good to know if the quote provided is from one of the top life insurance firms in the UK that specialise in life policies. They will normally give the best quotes, but not necessarily the most benefits. This is where the comparison sites can be helpful for the potential customer in making the right choice by checking a variety of important factors.
These provide short term (mostly one year) non-life policies, e.g. car and home-insurance. But, over time they have used their brand power to move into life insurance by taking over smaller specialist firms with expertise, knowledgeable staff and existing customer base. Some general insurers also use the wholesale market for life insurance from third party specialists, but with their own brand.
These are both specialist and general insurers and are differentiated by their ownership status rather than the type of policies they sell. Unlike most other insurers, mutual firms are owned by their policy holding members.
How to Decide?
There is the obvious premium of the life cover that will aid the customer in deciding which policy to select. However, it is also important to look deeper into the top ten insurers presented by a comparison website by checking the inclusion or exclusion of some or all of the factors shown above.
David Nealson is an independent author and journalist who has specialized in writing comprehensive overviews of the leading providers in the insurance industry and their products. Check out his latest ones – the life insurance offerings of Aviva and Bright Grey .