Banking group Barclays has extended deals with Aviva and Legal & General in order to provide its customers with more comprehensive options for general and life insurance products.

The current general insurance from Aviva, offered through Barclays, will be accompanied by new life assurance and personal accident products, available on a non-advised basis. Products can be added online, over the phone or in the branch.

Legal & General will expand upon its current mortgage protection distribution deal with Barclays by adding family and mortgage life assurance and critical illness cover, available on an advised basis.

Paul McNamara, Barclays’ managing director of insurance and investments, said: “We look forward to building on our already successful relationships with Aviva and Legal & General to provide our customers with a comprehensive range of competitive and easily accessible insurance, which they can tailor to their needs.”

“This agreement brings market leading capabilities to support Barclays aim (sic) of better meeting our customers’ needs across our channels, whether online, over the phone or through our extensive branch network.”

Research by Sainsbury’s Finance suggests that many ex-smokers are not taking full advantage of their healthier, smokeless lifestyle because they are not informing their life insurance providers.

According to the recent research, the average cost of a life insurance policy for a smoker is just shy of £210, whereas the average cost for a non-smoker is around £114; a huge difference of almost £100. It seems that, collectively, ex-smokers are paying £316million too much for life insurance, even though it would only take a short coversation with the insurer to instigate the savings.

For an insurer to class a policyholder as an ex-smoker, as opposed to someone in the process of quitting, then that individual must be free of nicotine-replacement products as well as cigarettes for a duration of at least one year.  The research found that 6.5 million ex-smokers with life insurance policies fit the aforementioned criteria, but 51% had not told their insurance providers.

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No Smoking Day is upon us, and with that we receive a timely reminder of how much money can be saved through stubbing out the habit for good. Life insurer Aviva has released statistics showing that if smokers quit, they will pay significantly less on their life insurance premiums.

Women who hit 35 on their next birthdays, can save up to £40.56 if they’ve quite smoking and are on a 15 year level term assurance (without critical illness cover) and with a sum assured of £75,000. Men who are 25 on their next birthdays can, with 30 year level term (with reviewable critical illness cover) with a sum assured of £125,000, can net a saving of £151.56 annually.

Astonishingly, a smoke-free 45 year old male will make a maximum saving of £276.60 annually for his 10 year level term policy (no critical illness cover), with a sum assured of £50,000.

Aviva revealed that 15% of their customers are still smoking, and, according to the Office of National Statistics, two thirds of British smokers do want to quit. The habit comes at both a financial and physical cost, with information about quitting available at smokefree.nhs.uk. This site will provide you will details about how smoking affects your health, and also allows you to operate a smoking cost calculator. If your pack of 20 cigarettes costs £5, and you smoke 20 a day, it is costing you £1825 annually; the equivalent of 30 Premier League tickets, or 6 weekends in Paris.

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Back in early 1999, Equitable Life went to court attempting to gain approval to enforce bonus cuts on policyholders. Equitable Life was dealt the most extreme of blows when the House of Lords upheld the decision to refuse its request; a year after it had actually won the first stage of court proceedings.

BBC had quoted the cost of losing at a whopping £1.5 billion, leaving Equitable Life in a desperate situation where sale was the only feasible option. Shortly afterwards, policyholders found out that with-profits policies would not receive any growth for seven months, new business would be stopped and the penalty for withdrawal would increase. Chaos at Equitable Life ensued, and 9 years later policyholders are still fighting tooth and nail for some kind of compensation.

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House insurance could become more expensive as a result of climate change, an insurance body has said.

The Association of British Insurers warned that insurance companies would have to pay out more for flood and windstorm damage as temperatures increased. The extra cost would in turn be passed on to policyholders in the form of higher premiums.

Wales and the south-west of England would be worst hit, the report said.

The ABI report, which used predictions from the Met Office, studied the financial effect of temperature increases of 2, 4 and 6 degrees Celsius.

A rise of 4 degrees could see the average annual insured losses from river flooding and flash floods in the UK rise by 14% to £633m by 2060, while wind storm losses could increase by 25% to £827 million each year.

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Critical illness claims rose sharply last year, new figures from the Norwich Union show.

According to the data, the number of claims made to the insurer for critical illnesses in 2008 was up 14% on the previous year. Over the course of last year Norwich Union paid out £121 million for such claims, and a further £216 million to the families of customers who had died or been diagnosed with a terminal illness. The largest proportion of claims - 63% - were from people who had been diagnosed with cancer.

The insurance firm declined 2% fewer critical illness claims than a year earlier, with an average £75,000 payout on 90% of claims. 2% of claims were rejected for non-disclosure of information - whereby a customer withholds his medical history when filing the claim.

Michael Whyte, chief underwriter at Norwich Union said that he was pleased with the figures, because they show that more people are aware of the guidelines in making an illness-based claim.

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More than 10 million people in the UK could be paying for the wrong insurance policy because of a change in their circumstances, according to Barclays.

Life changing events such as a new job, a baby or taking out a mortgage for the first time could all mean that certain policies become unsuitable, particularly when it comes to life insurance, health insurance and income protection. According to research by Barclays, 40% of protection policy holders have had such an event since they last reviewed their cover. In the current economic climate it is especially important to regularly check the terms of your policy, since job losses and repossessions are set to rise further in 2009.
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For the record, I’m what serious smokers derisively call a ‘casual smoker’, i.e. someone who only smokes when out in a beer garden or at a party. I managed to successfully give up a 20 a day habit a two years ago, but I still have the occasional lapse, and cave in when I go out with my friends, but now I’m even thinking of throwing in the tobacco towel completely.

Why? Because of the money. Despite the government slapping 77% of VAT on tobacco, cigarettes have continued to become more affordable year on year since 2000, when the price rises on a packet of smokes were changed so that they were in line with inflation. After the budget this year, the cost of a packet of fags went up by some 11p and 9p two years before that. But with inflation already rising, the 2009 budget already doesn’t look good for smokers.

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