incentive on life products
Reflecting the competitiveness of the UK’s life insurance market,
the Post Office Life Insurance, a unit of the country’s Royal Mail
postal service, has hung out a £100 ($205) cashback lure to
prospective buyers of its new level term and decreasing term life
insurance products. A minimum premium of £10 per month is required
to qualify for the £100 cashback offer, which is payable after the
12-monthly premium is paid. The offer is limited to one cashback
payment per customer.
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The new products are the latest from the Post Office, which entered
the UK life insurance market in September when it launched its
first product, a life insurance plan for people aged 50 and over.
The Post Office distributes products via its 14,000 branches, a
call centre and a website. All products are underwritten by UK
insurer Norwich Union.
The Post Office’s new level term and decreasing term products are
keenly priced. For example, single life cover of £250,000 for 25
years on a 30-year-old male non-smoker costs £11.75 per month.
Comparable monthly premiums for similar policies sold by retailers
Marks & Spencer and Tesco, and consumer credit provider Virgin
Money, are £12.40, £13.36 and £12.50, respectively, according to
the Post Office.
Despite being competitive, the Post Office’s cover is not the
cheapest, stresses personal finance products monitoring service
Moneyfacts. According to Moneyfacts, a female non-smoker aged 30
looking for £250,000 of level term insurance over 25 years would
pay total premiums of £3,425 with the Post Office once the £100
cashback has been taken. However, by opting for the most
competitive premium on offer – from brokers AA Insurance Services –
the same customer would pay a total of £3,099, a saving of
£326.
Moneyfacts said insurer Legal & General, specialist term life
product provider Lutine Assurance and online bank Egg could also
provide a greater saving, despite not offering the attraction of a
cashback deal
