Consumers will soon have access to cheaper life assurance through their pension as the Financial Services Authority (FSA) is set to lift restrictions on who can sell this cover.

Pension term assurance - that is, life insurance bought through a pension wrapper which pays out a lump sum on death within a set period of time - is favoured by higher rate taxpayers who can claim tax relief on their premiums. However, it has not been widely popular because of rules which state that cover can only be bought when other pension contributions are being made and total payments - including life insurance premiums - are subject to strict limits on overall pension contributions.