Review of Post Office Life Insurance

Post office life insurance is available to people who are UK residents aged 18-70 who are not members of the Armed Forces, Territorial Army, or Reservists. UK residents aged 50-80 can take out over 50s life cover with the Post Office.

You will need to disclose your age, medical history, and whether or not you smoke when you apply. The length and type of cover you want will also be taken into account when your application is being considered.

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Pros
  • Start paying from just £7 per month
  • Policies up to £500,000 of cover
  • Choose level, decreasing, or increasing cover to suit your lifestyle.
  • Terminal illness cover is included free
  • Early payout if you’re diagnosed with a terminal illness
  • Free access to the Post Office Money Helping Hand Service
Cons

About Post Office Life Insurance

Post Office Life Insurance is provided by The Royal London Mutual Insurance Society Limited and is sold by the financial services brand of the Post Office, Post Office Money.

With the Post Office, your policy doesn’t have a cash-in value, but if the insured person dies or is diagnosed with a terminal illness in the last 18 months of cover a lump sum will be paid out (as long as it is expected they won’t live longer than 12 months). This payout will not be subject to capital gains or income tax but it may be subject to inheritance tax.

The policy is cancelled after such a payment is issued and the terminal illness benefit is payable only once. Policies may be cancelled if a payment is not made, and previous premiums won’t be refunded to the policyholder.

Post Office Insurance Options: Our honest Breakdown

The Post Office has two main insurance options available: term plan and over 50s life cover. They offer very competitive prices and some great extras on these policies (such as a year of free life cover for parents of young children), but if you’re looking for the whole of life cover then the Post Office isn’t the place to look.

You can choose either level, decreasing, or increasing Post Office life insurance cover (explained below) to suit your financial situation, and they also offer tailored joint policies for anyone aged 18-70. Although it’s important to bear in mind that policies are hard to change once you’ve entered into them.

Residents of the UK aged of 18-70 are eligible for between £5,000 and £500,000 worth of term life cover. Premiums start at just £7 per month.

UK residents aged 50-80 are eligible for up to £10,000 of cover with Post Office life insurance, with premiums ranging from £7 to £100 a month.

Post Office life insurance premiums are based on the age, medical history, smoking status, and the type/length of the cover. You can calculate the total lifetime premium by multiplying the monthly premium by 12 and then multiplying by the policy term. Premiums for smokers are higher than that of non smokers.

The Post Office offers three different types of cover across their insurance options - all are explained below.

Different Types of Cover With the Post Office

Level Cover

  • Premiums are a fixed amount every month during the policy.
  • Pays out a fixed cash sum of up to £500,000.

Decreasing Cover

  • Starting from a maximum of £500,000 the cash sum paid out as death benefit reduces over time.
  • This option is designed to cover debts that decrease over time like loans and mortgages.

Increasing Cover

  • The sum you will be paid out by an increasing cover policy increases 3% each year.
  • Increasing cover is designed to help offset the effect of inflation during the course of the policy.

Post Office Life Insurance Policies Available

Term Life Cover

  • The Post Office offers different lengths of term life cover to UK residents between 18 and 70 who aren’t members of the Armed Forces, Territorial Army, or Reservists.
  • Policies are available from £7 a month, but quotes vary.
  • Critical illness can be added as an extra.
  • Parents with children under 4 can apply for up to £15,000 of free life cover (which lasts for a year). Both parents can apply for policies.
  • If the insured person dies or is diagnosed with a terminal illness in the last 18 months of cover, a cash lump sum will be paid out (as long as it is expected they won’t live longer than 12 months).
  • Once your policy has started, you will not be able to increase your cover term, main benefit cash sum or monthly payments, or add critical illness benefit.
  • Common law partners, civil partners, husbands and wives, and those who share a mortgage are eligible for joint cover.

Over 50s Life Cover

  • If you’re a UK resident and aged 50-80, you can get cover immediately with the Post Office.
  • Premiums range from £7-£100 per month and policies pay out as much as £10,000.
  • Can get immediate cover for accidental death and full cover after 1 year.
  • Cover can be reduced to bring payments down if necessary.
  • Funeral benefit option to get £300 towards the cost of your funeral.
  • Post Office life insurance for over 50s has a Defaqto 5 Star Rating.

Post Office Life Insurance: Conclusion

Post office life insurance offers a range of term life insurance options to suit various age ranges and needs. With prices starting from £7 per month and terminal illness cover included free, the Post Office a good option for any resident of the UK aged 18-80 looking for term life cover.

Our comparisons will help you choose between the Post Office’s life insurance policies and a variety of other term insurance options and over 50s cover. You’ll also be able to compare them against the whole of life policies available elsewhere.