Loopholes in tax laws could slash life insurance premiums

Wed, 13 Sep 2006

Life insurance customers in the UK could save up to 40 per cent on the premiums for their life insurance policy by exploiting a relatively simple tax loophole.

Changes in the tax laws mean that pension term assurance policies are now far more attractive. Consumers can take out ‘pension’ life policies without making any pension contributions, and receive significant tax relief savings that are deducted at source.

An expert from the website Moneynet said: "This presents an unmissable opportunity to make savings for many people, whether they already have life insurance running or not. If you are looking for a new policy now is an excellent time to apply, and for those with existing life cover it may be possible to rearrange cover at a cheaper price under these new rules."

In theory, 22 per cent is deducted from the premiums paid, and higher rate taxpayers could be eligible for an extra 18 per cent of relief available through their annual tax return.

An expert from the site said: "There are some restrictions which apply, particularly for higher earners, so we would recommend that consumers receive advice from an appropriately qualified professional who can search the market, compare prices and advise on suitability."
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