What is cashback?
Cashback websites offer a way for consumers to earn money back on their purchases.
Money back can be earned on all manner of products, including life insurance.
Every time you click through from a cashback website, either to an insurer’s or a comparison site, they pay a commission for the customer referral.
The cashback site then passes this commission back to you in the form of cashback.
But are these enticing cashback offers actually worthwhile and is this a good way of buying your life insurance?
*Please note: this ‘life insurance with cashback’ article was published on 15/04/19.
Currently, there are two main cashback sites in the UK who dominate the market; TopCashBack and Quidco.
Both these sites offer cashback on the purchase of life insurance policies via their platforms.
In order to benefit from these incentives, you’ll need to register your details with these cashback sites.
In the first instance, this means submitting your name and email address, but further down the line, you’ll also need to set up BACS details.
Whilst not all insurers or comparison sites are listed on cashback sites, many recognisable brands are, such as:
Smart insurance was the only provider we found who offered cashback direct to customers via their website.
They currently pay back 10% of the premiums paid in within 14 days of paying your 12th monthly payment.
The best cashback on life insurance offers
Whilst the below offers were the most valuable we identified at the time of writing this post, it’s important to say these offers are constantly changing.
What’s more, cashback sites also label certain life insurance offers as either promoted (where the insurer pays for the no. 1 position) or exclusive listings.
Both these techniques are used to make certain insurers and their offers more prominent within their results.
However, the benefits of and principles behind cashback sites remain.
TopCashBack top 5 offers:
- Beagle Street – Up to £700 cashback
- Royal London – Up to £595 cashback
- Confused.com – Up to £595 cashback
- Aviva – Up to £525 cashback
- LV= – Up to £480 cashback.
Beagle Street’s £700 TopCashBack offer
Let’s look at the headline offer from Beagle Street on TopCashBack.co.uk of up to £700 cashback.
Sounds pretty appealing. Let’s look at the detail…
Firstly, is everyone entitled to claim the £700 cashback when taking out a policy with Beagle Street?
The answer, unfortunately, is no.
In fact, only a tiny percentage of policyholders are eligible, as obtaining this maximum sum requires your monthly premiums to be £150 plus.
The reality for most of us, regardless of policy type and cover amount, is that our premiums will cost nowhere near £150 a month.
For example, Beagle Street’s current TV advertising campaign promotes £200,000 worth of cover for under £7 a month, which puts the above into perspective.
The £700 figure is quoted to encourage click-throughs, thereafter the cashback offer (as with ALL offers) is scaled.
The higher the monthly premium, the larger the commission the insurer pays, the more cashback you receive.
A more common premium would cost around £14 a month, which could still earn you £90 cashback.
However, as with free welcome gifts offered from insurers, the monetary value of the cashback over the course of an entire policy term is relatively insignificant.
Think about if you were to take out a life insurance policy over a 30-year term to protect your family.
A £14.50 monthly premium for £200,000 worth of cover versus a £12.25 premium for £210,000 over the 360 months’ is a sizeable difference, regardless of the cashback incentive.
In this hypothetical scenario, over the policy term that’s a saving of £810 (£5,220 – £4,410) for £10,000 more coverage!
The most important thing when securing life insurance is making sure you get the right policy, an appropriate term length, whilst locking in the best premium.
Remember your motive for taking out life insurance in the first place; to make sure your family would be protected if anything were to ever happen to you.
Try not to let a cashback incentive detract from your original motivation for life cover.
What’s in the TopCashBack small print?
- The quote has to be started and completed solely on TopCashback
- You’ll not be eligible if you’ve previously been a Beagle Street, FiftyLife, Budget Life Insurance or Virgin Money Life customer in the last two years and have received an incentive
- Quotes obtained through a comparison site and then completed on TopCashback won’t be eligible
- You must have your BACS details registered in order to acquire cashback
- Cashback rates are subject to change, (up and down).
As you can see from the above, if you decide to go down the cashback route, it’s important to read the small print to check you’re eligible.
Quidco top 5 offers:
- Beagle Street – Up to £750 cashback
- Royal London – Up to £680 cashback
- Confused.com – Up to £610 cashback
- Post Office – Up to £580 cashback
- Aviva – Up to £545 cashback.
Royal London’s £680 cashback offer
This time let’s look at the Royal London £680 cashback offer currently available via Quidco.com.
Again, the only way you’ll be eligible for the headline cashback offer is to pay a monthly premium of at least £90.
For most, the level of cover £90 a month buys you is simply not necessary.
These costs in the vast majority of circumstances can be covered for a mere fraction of £90 a month.
A more common premium price would be between £15 to £30. This premium cost would entitle you to cashback from £105.
As previously mentioned, if you know the policy you require and you can secure it through a cashback site, then it makes sense to benefit from some money back in the process.
However, the main objective should always be to take out the right long-term cover for you and your loved ones.
What’s in the Quidco small print?
- The offer is only available to new customers if you’re renewing you’re not eligible
- If you apply an additional discount that reduces your overall purchase, this may cause your cashback to be declined
- Quotes obtained through a comparison site and then completed on Quidco won’t be eligible
- Quotes obtained through Royal London and then completed on Quidco won’t be eligible
- You must have your BACS details registered in order to acquire cashback
- You have to complete your purchase online to qualify, (not over the phone).
The importance of comparing quotes
The most effective way of securing suitable life insurance is to compare different policies and quotes.
No two policyholders circumstances are ever the same. We all have a different medical history, different aspects of our life we need to protect, different budgets etc.
As a result, the right policy and insurer for one might be completely unsuitable for another.
One option is to carry out the research yourself. This can be a good option and opens you up to the entire marketplace.
However, this approach can be very time-consuming. Also, if you’ve questions regarding how policies differ or perhaps jargon you don’t understand you can’t ask for help.
Another option is to use comparison websites, such as comparethemarket.com or gocompare.com.
This option is very popular, in part because it’s so convenient. However, there will be certain insurers not listed in their comparison findings.
Lastly, there’s the option of a life insurance broker…
The benefits of an FCA registered life insurance broker
The key benefit to using a broker, such as Reassured, is you can draw on our vast industry experience.
A broker takes your individual details (age, budget, dependants, cover amount, term length) and searches the insurers on your behalf, sourcing the best available quotes.
We then pass these quotes back to you to choose the most suitable policy.
We can also:
- Explain any aspects of the cover you don’t understand
- Untangle any life insurance jargon that doesn’t make sense
- Complete the application on your behalf, (saving you time)
- Help write your policy in trust, (avoiding probate and 40% inheritance tax)
- Help your loved ones with the claims process.
And the best bit, our award-winning service is completely free for you to use.
Cashback websites are a very viable option in 2019, especially if you know exactly the type of cover you want.
However, always compare quotes, as premium prices can vary wildly due to different processes and underwriting criteria.
If you need help running a quote comparison and unpicking the jargon, as well as support during the application, get in touch.
We’d love the opportunity to help secure your family’s financial future, whilst saving you money.
Please note, if you purchase life insurance through a broker, like Reassured, you’ll not be entitled to cashback.