Premium rates for retail life insurance products continue to fall, according to a joint study by ClearView and Plan for Life.
The study analysed premiums for life cover offered by 11 life insurers between December 2004 to June 2012, and found an average fall of approximately 10% across all insurers.
Premiums were averaged across four ages (35, 40, 45 and 50) for a male non-smoker applying for three sum insured amounts ($250,000, $500,000 and $1 million).
The research also found:
- A 23% fall in average rates by one insurer
- Only one insurer had an increase in average rates (by 2%)
- A 16% fall in the highest average premium charged in 2012 versus 2004
- The difference between the most expensive and cheapest product in 2011 was 14%
Head of Product and Underwriting at ClearView, Clive Levinthal, said: “The falls can be partly attributed to improving mortality rates over time. However, I believe the main driver is margin squeeze caused by competition from good broking activity by independent advisers”.
“Independent advisers have shown that they add tremendous value to the Australian public by being able to offer their clients more competitive premiums and, in many cases, improved coverage terms,” he said.
Click here to view the latest Plan for Life analysis of the life insurance market.
