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Life insurance products to confirm to new tax rules

Date: Thu, 23 Mar 2006

Recent changes in tax law means that many life insurance products are adapting to offer cheaper premiums to policyholders.

Leading provider Legal & General is launching life insurance cover that is in line with the government's plans to simplify tax rules on pension term assurance. The changes mean that people do not have to have a pension plan and there will be less restrictive contribution limits.

Life insurance policies will also have lower premiums for many customers. For example, a 34-year-old male non-smoker, with a level sum assured of £100,000 for a 25 year term would pay a premium of £9.75 per month on an ordinary Term Assurance.

However, the same person would pay a premium of just £9.06 per month for a Tax Efficient Life Insurance Plan, if they are a basic rate tax payer. Higher rate tax payers would only have to pay £6.97 per month.

Bernie Hickman, protection director at Legal & General said: "We found that the majority of people found pension term assurance appealing, particularly those in the higher rate tax bracket where they could potentially save up to 30 per cent on their premiums, compared to ordinary term assurance."

The new scheme will be available to customers from the 10th April this year.


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Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.