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The Latest Trends in UK Life Insurance Prices

When examining the latest price trends for life insurance premiums in the United Kingdom, one of the key considerations that must first be addressed is the past recession and the rather challenging years between 2008 and 2012. As there were less individuals and businesses opting for life insurance coverage, rates during these times had plummeted. Correspondingly, investment into the insurance sector dropped noticeably. Still, signals that the United Kingdom is now emerging from this protracted recession are likely to affect policy rates during 2014 and beyond. Let us examine where these prices are headed and why this is the case.

Financial Liquidity

The key factor to allow any economy to rise out of a recession is a return of liquidity into the markets. Unsurprisingly, the insurance sector will likewise feel this boost. Due to the fact that this industry represents approximately 1.5 per cent of the country's gross domestic product, this increased growth is seen to be occurring as a rebound effect from the last few years. Therefore, more individuals are expected to purchase life insurance premiums and the sector itself will become much more liquid than during the 2008-2012 time period.

Price Rises and Increased Investment

Many analysts predict that with this very high growth rate (an estimated 11.5 per cent in comparison to the 2012-2013 period), general premiums will likewise increase for the average consumer. While the companies themselves will be dictating many of the prices that can be expected, it should also be recognised that a higher amount of investment in this sector will allow insurance companies to enjoy more leeway in regards to the prices that they will charge for their premiums.

The Competitive Factor

While industry statistics illustrate that these premiums will rise in direct correlation to the sector growth rate, such a trend may not be universal. In other words, it would be presumptuous to expect a "flat" increase that will correspond to the expected growth predicted for this year and beyond.

Instead, the increased liquidity in the sector will enable businesses to be more competitive. As in many industries, this will enable them to offer more bespoke packages to the individual consumer. With such flexibility and modularity, the buyer will therefore have more options in regards to which policy may suit him or her the best. So, there is a bit of a disparity between an industry-wide premium increase and individual policies that may very well be encountered at appreciably lower rates. In simpler terms, more policy options will likely equate to more flexible pricing packages.

In essence, prices in the industry are now seen as being on a rebound since 2012 and this trend is expected to continue (barring a return to a nationwide recession) through 2014 and beyond. While this may indeed equate to the premium rates rising in a general sense, the increased competition between providers that should correspond with this liquidity will allow consumers more options in regards to the plans they can choose and the premiums that they will be obliged to pay.

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