3.1.2 Premium Levels
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Generally speaking, level term assurance premiums are easier to
compare because it is a comparatively simple contract offering a
fixed death benefit for a fixed premium.
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Comparing different types of term assurance is usually quite straight
forward. Using level term assurance as a basis for comparison, for
the same person, with the same sum assured:
- Decreasing term will be cheaper
- Convertible term will be more expensive
- Renewable term will be more expensive for the same reason as convertible
term-there is an increased risk owing to the non-medical, no underwriting
element relating to the built in option.
- Whatever type is chosen, the longer the term the more expensive
the premium because of the increasing period of risk.
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Comparing 'the same' term policy amongst providers will show differences,
generally relating to:
- Underwriting experience.
- Intrinsic expenses.
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Comparing whole life policies may not be so straight forward, as
unit linked and universal policies may have different options available.
Additionally, the investment element will not be comparable on the
some basis as the life assurance element
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