Summary

New rules coming into force for the 2006 tax year mean that you can save on life insurance if you combine it with your pension - read on for more details.

Life Insurance. Let your pension save you money on Life Insurance . Page 2

Author: Anna Richardson

Here are a few other pointers that will make a difference:

1. You won't be able to convert your existing life insurance policy

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Life Insurance News

into a combined ( medical insurance ) policy with a pension. You can only benefit from the tax relief if it's a new pension and life insurance scheme, bought together at the outset as a combined purchase.

2. You can't get a joint life insurance policy with the combined policy. It will be ( home insurance quotes ) your name on the life insurance and your name on the pension - that's the only option.

3. Critical illness cover won't be available as an addition to the life insurance. It's a good form of insurance because it pays out if you fall ill with a serious illness that is listed on your policy. But if you want this type of insurance, you'll have to arrange it separately.

We advise that you look into the matter carefully before making a decision. If you ( life assurance ) already have life insurance, the premiums will now be higher than they were because you are older than you were when you first arranged the policy. Age makes a big difference to premiums. Also, if you have developed a medical condition since taking out your first policy, you'll pay more on your new policy, similarly if you are overweight, they will raise your premiums. If you have a serious condition or are extremely overweight, they could refuse to insure you.

The advice is: don't cancel your existing cover until you have your new life insurance cover confirmed in writing. Too many people cancel their existing policy, then either get rejected or find the new premiums are too expensive, and then it's too late to go back on their decision. Once the decision is confirmed, check you will still be making a saving, otherwise you're best off sticking with your existing arrangements.