Life Insurance With Cash Back
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At DiscountLifeCover.co.uk we offer a whole of market online quote option. This means you can quote from all of the UK providers to make sure you are getting the best deal. We then give back commission to bring the premiums down. Not only will you be getting the cheapest premiums, but you will also receive cash back! Unlike many other life insurance sites we allow you to compare the quotes directly online. We are not a marketing company who are looking to sell on your details and bombard you will sales calls. You can compare online and apply online, its easy!
What Is Life Insurance?
A life insurance policy serves as a life jacket for your family in case you pass away, god forbid.
There are many companies that offer life insurance plans with varying premiums and durations, but did you know that some companies have some cashback deals on their life insurance policies?
That’s right; with such policies, you might be eligible to get a per cent of the premiums you paid over the course of the policy’s term without requiring any additional regulations.
In this guide, we’ll explore how cashback life insurance policies work, what companies offer them, and what you need to be aware of before making a life insurance purchase.
Life insurance is a type of personal insurance where the insurance company pays a lump sum amount of money or periodic payments to the insured’s family or dependants in the sad event that they die.
To benefit from a life insurance policy, the insured has to pay monthly premiums to the company for a preset period, called the insurance term. The term’s duration typically ranges from 10 to 30 years.
What Is Cash Back Life Insurance?
“Cash Back” basically means that whatever the item, product, or service you signed up for or paid for, you’ll be getting some of the money you paid back.
By opting for cashback life insurance, you’re essentially saving yourself a fraction of the premiums you’re going to pay over the policy’s term.
However, it’s essential to keep in mind that just because a life insurance plan comes with a cashback deal doesn’t necessarily mean that it’s the best deal you can get. It’s still a marketing tactic at its core, so the cashback money you’re getting might just be included in the cost of the monthly premiums.
In other words, it’d be best if you compared the deals offered by different companies on the market before deciding on one simply because it has a cashback offer.
You won’t find two companies that offer identical plans to everyone. There are many variables that come into play, like your budget, number of dependents, and medical history. Based on these factors, each company will tailor a plan just for you.
What makes things different is that one company may overlook specific aspects of your health status, while others may denote it as high-profile determinants of your term duration and premium values.
Of course, comparing policies isn’t as straightforward as you might think. There are many details that take a while to understand and recap.
One easier way to compare policies is to use a website dedicated to just that, like gocompare.com. Alternatively, you can opt for a life insurance broker if you can’t find specific policyholders on comparison websites.
Life Insurance Terminology
Before we get into how cashback life insurance policies work in greater detail, let’s familiarise you with the basic life insurance terminology just to make sure that we’re on the same page here.
Face value is the amount of money that the policyholder gives to the beneficiaries in case the insured person passes away.
The death benefit is basically the lump sum amount of money from which the face value is taken. It comprises the coverage that the policyholder will prepare for the beneficiary if the insured individual dies.
The beneficiary is the person who receives the face value from the policyholder if the insured person passes away. It could be a single beneficiary or multiple ones, keeping in mind the insured individual is the only one who has the right to decide who the beneficiaries are.
Term Life Insurance
The term of a life insurance policy is the duration of the policy, over which the individual who purchased the policy is covered in case of death. It’s also the period when the insured individual is required to pay premiums.
A rider is simply an extra life insurance enhancement that provides additional coverage. An example of that is critical illness coverage, where the insured has the right to make an insurance claim. However, the cash value will probably be less than the death benefit.
Premium is how much the insured person pays per month in exchange for insurance coverage.
How to Buy Life Insurance With Cashback
To buy life insurance with cash back, you need to search for a provider online and complete the application.
In some cases, you’re obligated to go through the process yourself without guidance as a prerequisite for cashback eligibility. However, some companies let you opt for an insurance broker and still benefit from their cashback offers.
Just make sure that you read the terms and conditions related to cashback eligibility. For instance, some companies only start providing cash back after you’ve successfully paid your insurance premiums for at least 12 months.
Once you submit the application, wait to hear back from the company on its status.
How Much Cash Back Can You Get With Life Insurance?
It depends on your insurance and monthly premiums value. The higher your premiums are, the more cashback you’re expected to receive.
You might be able to receive up to £200 from cashback, but most people who opt for life insurance policies aren’t likely to sign up for anything that requires them to pay £200+ a month. In other words, the more likely number you could get from cashback deals is something around £100.
Best Cash Back Websites for Life Insurance
DiscountLifeCovers is one of the best life insurance comparison websites that help you get a suitable cashback life insurance quote for your needs.
Once you visit the website, you’ll be prompted to click on the “Compare Quotes” button, which will take you to a quick application. The application requires you to fill in the details of the insurance plan you seek.
You can submit the needed cash value, specify whether you need coverage for both you and your partner or just you, and even add extra requests like critical illness cover.
The website has cashback life insurance policies from a wide range of providers, including Aviva, Legal & General, Scottish Provident, FriendsLife, Vitality, and PruProtect.
On the website, you’ll find several calculators that help you get a better idea of your premiums, cash value, cashback amounts, and interests. These include:
- Life Insurance Calculator
- Over 50 Life Insurance Calculator
- Over 60 Life Insurance Calculator
- Decreasing Term Life Insurance Calculator
- Whole of Life Insurance Calculator
TopCashBack is one of the most reputable websites in the UK when it comes to cashback life insurance policies. The website doesn’t offer its own life insurance policies. Instead, it lists down some of the best deals from companies like LV=, Beagle Street, and Aviva.
LV= offers a cashback value of £1,202.25, but this only applies if you opt for the highest monthly premium, which is £250+/month. The same goes for Beagle Street and Aviva, offering maximum cashback values of £1,125 and £1,000, respectively.
There are some other options that include Co-op and Legal & General. Co-op’s maximum cashback value is £1,100, compared to £1,050 for Legal & General.
The TopCashBack small print encompasses the following conditions:
- It’s mandatory for a started quote to be completed exclusively on the TopCashBack platform
- cashback values may change over the course of the term
- The cashback deals are only offered to new customers
- You need to submit BACS info to become eligible for cashback
- The cashback offer is withdrawn in the event that you cancel the policy
- You’re required to take a look at the insurer’s terms and conditions by visiting the insurer’s website
- Obtaining a quote from a comparison website and completing it on TopCashBack isn’t accepted
Quidco works similarly to TopCashBack. It provides you with multiple cashback life insurance deals from several companies for you to choose from.
On a side note, it’s essential to familiarise yourself with the Quidco small print before taking any action. It displays the following conditions:
- Only new customers are eligible for the website’s cashback offers
- Applying a discount voucher on the purchase may result in the cashback deal getting rejected
- Starting a quote on Virgin Money or a comparison website and completing it on Quidco isn’t accepted
- All customers are required to submit their BACS details to become eligible for cashback
- The purchase must be fully conducted online for the cashback offer to be applied
Royal London offers policies with cashback values of up to £1,000. Their plans encompass the following life insurance policies:
- Level term life insurance
- Diabetes life insurance
- Decreasing term life insurance
- Over 50s plan
- Whole of life insurance
- Family income benefit
- Funeral plans
How to Choose the Right Cash Back Term Life Insurance Policy for Your Needs
Here are some of the factors that you need to take into consideration before purchasing a cashback life insurance policy:
Estimate How Much Coverage You Need
The first thing you need to do when thinking about getting cashback life insurance is to figure out how much coverage you actually need. As a general rule of thumb, 10x your annual salary is a good starting point for most people, or at least that’s what most financial experts recommend.
The money should secure your beneficiaries’ financial future for at least 10 years. Of course, the more the cash value is, the better, but that comes at the cost of higher premiums.
Decide the Term’s Duration
Opting for cashback life insurance is a long-term commitment, and you need to think about the suitable term for you thoroughly.
If you’re an older adult, it may not make sense to opt for a 30-year term insurance policy if you’re going to retire before the term ends. Sure, you’ll have your pensions, but these may not be enough to cover your expenses as well as the cost of the premiums.
Of course, you should also think about uncertainties. For example, are you confident that you’ll have stable income throughout the term’s duration to be able to pay the premiums consistently? If the answer is no, opting for the shortest possible term would be the wiser decision here.
Calculate the Cost Difference Between Cashback and Standard Term Life Insurance Policies
Calculating the cost difference across different cashback and standard term life insurance policies is crucial for you to get the best deal.
Cashback is nice, but if you’re able to pay much fewer premiums for the same insurance cash value, taking out your calculator and a piece of paper would make sense here.
Consider Talking WIth an Expert
As we‘ve mentioned, life insurance is a long-term commitment. So, it might be a good idea to consult an expert before making such a decision to ensure that you’re making your best financial move.
How Does the Cashback Work?
Policyholders may offer cashback deals in different ways. These include:
Cashback at the End of the Policy Term
Some policyholders provide cashback after the policy’s term has ended and you’ve paid all the premiums.
Many people prefer this type of cashback as it allows them to recover a percentage of the premiums they paid throughout the term. After all, if there are no insurance claims, you’ve basically paid coverage money for something that didn’t happen. The good news is you’re still alive, but the bad news is that you paid money without any value in return.
That’s the point of insurance policies, anyway. People get them just in case something unexpected happens, but if things went well, this means that you’ve paid monthly premiums for nothing.
With cashback at the end of the policy term deal, you’ll be able to recover some of the money you paid for coverage. But, of course, this is only applicable if you committed to paying your monthly premiums.
Purchasing an Insurance Policy Through a Cashback Website
If you’ve searched the web for policyholders that offer cash back deals, you’ve probably noticed that the cashback values claimed are insane. Some companies may even say that they’ll give you £2000 as cashback, but once you go through the application process, you’ll notice that the insurance value is within the 7-figure mark!
Most healthy adults don’t need such massive amounts of insurance coverage, so, in more realistic scenarios, your cashback value will be just a tiny fraction of those £2000.
What makes things even more complicated is that, by comparing these cashback deals with other policyholders’ policies, you could discover that the cashback deal is non-existent.
Assume that a company offers £150 as cashback value in exchange for you paying £20 every month as insurance premiums. Another company requires you to pay just £15 per month for the same insurance value with no cashback.
If you do the math, you’ll notice that both policies are pretty much on the same level when it comes to the net cost of the premiums.
Not to mention, if you decide to benefit from the services of a life insurance broker, you could get a much better deal with the exact same company that provides cashback offers on the condition that you don’t get it through a broker.
Get All Premiums Back in Case No Claims Were Made
Some policyholders don’t only offer cash back as a percentage of the paid premiums; they promise to pay you back 100% of the premiums you paid throughout the policy’s term at its end if no claims were made.
Sounds too good to be true, right? Well, yes and no. While you’d definitely get the premiums back as promised, you’ll most likely be paying more than you should each month relative to the insurance value.
Sure, you’ll be getting all of that back, but remember that money loses value over time due to inflation. In other words, it’d be better to pay £5 per month and get nothing back instead of paying £50 per month and getting all of that money back at the end of the term.
The smarter thing to do here is taking the money difference and invest it in a savings account, certificate of deposit, or other forms of investment.
Not to mention, it’d also be the wiser choice in case a claim was made. After all, it doesn’t make sense for a healthy adult to pay £50 per month for insurance while they can just pay £5 for the same insurance value.
It’s also worth mentioning that almost all companies that promise a 100% refund at the end of the term won’t let you cancel the policy when you want and request a refund. This doesn’t apply to other forms of insurance policies.
Get 10% of the First 12-month Premiums as Cashback
Another form of cashback life insurance policy is getting 10% of the first-year’s premiums as a gift once you pay all of them.
Again, in most scenarios, you’d probably be paying more than you should for the policy. It’d be better to pay a smaller per-month amount and not get any cash back as opposed to paying hefty premiums for a small gift at the end of the year.
Frequently Asked Questions
What Kind of Life Insurance Gives You Cash Back When Paid Up?
Life insurance that gives you cashback when paid up is called a “return of premium life insurance”. The insured person gets a full refund if they outlive the policy’s term, be it 10, 20, or 30 years.
Can I Get My Money Back If I Cancel the Return of Premium Insurance?
Yes. All companies are required by law to provide a grace period for customers to cancel their return of premium insurance policy and get their money back.
However, the grace period is often very limited, with a minimum of 10 days and a maximum of 30-days as stated by law.
How Much Does Cashback Life Insurance Cost?
Cashback life insurance is often more expensive than conventional life insurance policies, especially if it’s of the return of premium type. However, it can be worthwhile if you compare it to other options and find that it’d be a better investment in the long term.
It also depends on your financial status and whether you’d be OK to pay higher premiums but get the money back at the end of the term or prefer to pay smaller premiums and get nothing in return.
As for the actual cost, it varies significantly across different companies and individuals. You can request a quote from the company to get an idea of how things will work. Some companies offer free quotas, while others charge a small fee for them.
Is Return of Premium Life Insurance Worth It?
Return of premium life insurance policies can be worthwhile if insurance coverage is important to you.
If you have kids or your life partner doesn’t have a good job that allows them to cover their monthly expenses, life insurance would be a good backup plan for your family.
Nevertheless, you might want to consider comparing the costs of a return of premium life insurance policy with standard term policies to decide which of them would be the more valuable option for you.
Which Life Insurance Company Provides Cash Back?
DiscountLifeCover, TopCashBack, and Quidco are two of the most popular UK-based websites that offer cashback life insurance policies. To become eligible for their offers, you must register on one of the websites and complete the application.
Alright, so that was a detailed overview of life insurance cover with cash back plans.
To sum it all up, cashback life insurance can be an excellent way for you to get back some of the premiums you paid during the policy’s term.
Just make sure that you compare multiple plans from as many companies as you can to decide whether it’s actually a good deal, to begin with.
There’s also the option of consulting a broker. In most scenarios, you’ll be able to get a much better deal than if you sign up on your own.
For more information and answers on all things life insurance please visit our Life Insurance FAQ Page.
Discount Life Cover
At Discount Life Cover, we aim to provide you with peace of mind so that your future is secure. Therefore, the Life Insurance With Cash Back policies that we find for you are market leaders.
To find out more, don’t hesitate to contact us now and speak to a knowledgeable and dedicated advisor.
Discount Life Insurance…Why Use Us
We are an online advice service and as such have little overheads which enables us to give away more commission enabling us to me extremely competitive on price.
Having said all this, life insurance is not always about price and there are differences in the types of cover offered by providers. So we also provide an “advised sale” which means that we take on responsibility to make sure the policy you take is the right one and the most suitable for your circumstances.