Post Office life insurance review – is it any good?

18 min Read Published: 18 May 2022

Post Office life insurance review - is it any good?In this article, we explain how Post Office life insurance works and how it compares with the policies across the rest of the market. We also explain the best way to compare life insurance quotes as well as how to get up to £100 cashback when you buy a life insurance policy.

About the Post Office

The Post Office was established over 380 years ago and has around 11,500 branches across the UK, making it the largest retail network in the country.

Amongst the many products and services provided by the Post Office, you'll find travel insurance, home insurance, car insurance and life insurance.

About Post Office life insurance

All life insurance policies sold by the Post Office are issued and administered by Scottish Friendly Assurance Society Ltd. This means that you pay Scottish Friendly for the life insurance and if you die, it is Scottish Friendly that will pay the life insurance benefit.

You can buy life insurance with the Post Office either over the phone or online, but there is a slightly different process depending on how you buy your policy.

When you buy Post Office life insurance over the phone, you will speak to Post Office Ltd staff. Post Office Ltd is an appointed representative of Post Office Management Services Limited which is authorised and regulated by the Financial Conduct Authority.

However, if you buy Post Office life insurance online, your policy will be arranged and sold by Neilson Financial Services Ltd. Neilson Financial Services Limited is authorised and regulated by the Financial Conduct Authority and entered on the Financial Services Register under reference no. 594926.

How does Post Office life insurance work?

Post Office life insurance pays a lump sum of money if you die and meet the terms and conditions of the type of life cover policy you buy.

Post Office life insurance types

  • Term life insurance - includes level life cover, decreasing life cover and increasing life cover
  • Over 50s life insurance - life cover for 50 to 80-year-olds with no medical questions to answer

Post Office Term life insurance

Term life insurance is the most common type of life insurance that people buy. It covers the insured person's life for a set period of time and if they die within that time, the policy will pay a tax-free lump sum of money to their estate or nominated beneficiaries.

Post Office Term life insurance options

  • Level cover option - the amount of cover stays the same for the duration of the policy
  • Decreasing cover option - covers a repayment mortgage where the amount of cover reduces over time in line with how a repayment mortgage balance would reduce assuming the interest rate of 8% which allows for any fluctuations to the interest rate you pay over your mortgage term
  • Increasing cover option - the cover increases in line with inflation using the retail price index (RPI) each year to ensure that the real value of the insurance is protected against inflation. Your monthly payment will increase by 1.4 x RPI to fund the increase each time you accept it. You can decline an increase up to 3 times before the cover will be reverted to level cover.

Post Office Term life insurance summary

Post Office Term life insurance key features How it works
Types of life cover
  • Level cover - cover amount remains the same
  • Decreasing cover - cover amount reduces each year in line with repayment mortgage assuming an interest rate of 8%
  • Increasing cover - cover amount increases each year by RPI and premiums increase by 1.4 x RPI
Coverage Single or Joint life insurance options
Amount Minimum to the maximum amount of cover available by age:

  • 18 to 24 years old - £120,000 to £750,000
  • 25 to 29 years old - £80,000 to £750,000
  • 30 to 34 years old - £60,000 to £750,000
  • 35 to 39 years old - £40,000 to £750,000
  • 40 to 44 years old - £20,000 to £525,000
  • 45 to 49 years old - £20,000 to £425,000
  • 50 to 59 years old - £10,000 to £220,000
  • 60 to 64 years old - £10,000 to £100,000
  • 65 to 69 years old - £10,000 to £50,000
  • 70 years old          - £10,000 to £25,000
Term Cover for between 5 and 40 years
Payments Start at £5 and premiums are payable monthly by direct debit
Terminal illness benefit included Yes - early death benefit payment is available if you are diagnosed with a terminal illness and death is expected within 12 months.
Qualifying rules UK residents only
Age limits 18 to 70 years old
Included benefits
Optional extras (add to cost)
Exclusions Death or terminal illness claims that are caused by an intentionally self-inflicted injury within 12 months from the start date of the policy will not be paid.

Post Office Over 50s life insurance

Over 50s life insurance, also referred to as Over 60s life insurance or 50 Plus life insurance, is a type of 'whole of life insurance' policy, which means that it covers your life until you die and pays out a tax-free lump sum to your nominated beneficiaries at that point.

Over 50s life insurance appeals to those who wish to buy life insurance that has no end date. It will pay up to £10,000 when you die and you do not ned to answer questions about your health.

Post Office Over 50s life insurance options

  • Increasing cover option - cover amount increases each year by 3% of the original cover amount chosen and your monthly payment will increase by 4.5% of the payment amount at the start of the policy. You can decline an increase up to 3 times before the cover will be reverted to level cover.
  • Funeral benefit option - you can opt to have your life insurance paid out directly to Cooperative Funeralcare to pay for your funeral. Depending on the type of funeral plan chosen, discounts available are £250 for Tailored funerals, £100 for Essential funerals and £50 for Direct to Cremation funerals.

Post Office Over 50s life insurance summary

Post Office Over 50s life insurance key features How it works
Types of life cover Whole of life cover that pays a lump sum when you die
Coverage Single or Dual life insurance options
Amount The maximum amount of cover available by age:

  • 50 to 69 years old - £10,000
  • 70 to 74 years old - £9,000
  • 75 to 80 years old - £6,000
Term Whole of life cover
Payments Start at £5 and premiums are payable monthly by direct debit

Payments stop if you reach age 95

Qualifying rules UK residents only
Age limits 50 to 80 years old
Included benefits
Optional extras Increasing cover - the amount of cover increases each year by 3% of the original cover amount chosen and your monthly payment will increase by 4.5% of the payment amount at the start of the policy
Exclusions Death or terminal illness claims that are caused by an intentionally self-inflicted injury within 12 months from the start date of the policy will not be paid.

Death due to anything other than an accident is not covered for the first 12 months of the life cover

Post Office life insurance - Free additional benefits

Post Office Here to help Service

The Post Office "Here to help' service provides life insurance policyholders with access to a dedicated nurse from an independent nursing service at no additional cost

Nurse support for you and your family:

  • Bereavement support
  • Serious illness support

Nurse support for you if you are dealing with a serious illness:

  • Practical advice
  • Emotional support
  • Access to assessed therapy
  • Access to counselling 

Post Office Health & Wellbeing Service

Like many other life insurance products in the market, the Post Office offers a health and wellbeing package that provides various types of support to keep you and your family healthy at no extra cost.

The Post Office Health and Wellbeing Service provides life insurance policyholders, their partners and their children up to age 21 with:

  • 24/7 Online GP (UK registered)
  • Nutrition and Fitness professional to get you to your goal
  • Mental Health and Health Check specialist 365 days a year

You are able to use the above services as many times as you need.

Post Office Free Parent life cover

Free Parent life cover through the Post Office is currently unavailable to buy.

Post Office life insurance - Optional benefits (Extra premium required)

Post Office Critical illness cover

Critical illness cover with the Post Office can be added to any of the term life insurance policies.

Post Office critical illness cover allows you to insure an amount between:

  • £10,000 to £200,000

Post Office critical illness cover will cover you against a diagnosis of the following specific serious illnesses:

  • cancer - excluding less advanced cases
  • coronary artery by-pass grafts - with surgery to divide the breastbone
  • heart attack - of specified severity
  • stroke - resulting in permanent symptoms.

Post Office critical illness cover is an optional extra and you will be required to pay a higher premium if you opt to add the benefit. The critical illness cover provided by the Post Office is a very basic version of critical illness cover when compared with other critical illness products. To compare the best cover, read our article, "Best and cheapest critical illness cover in the UK"

Post Office Children's cover

Children's cover can be added to a term life insurance policy with the Post Office at a small extra cost.

The children's cover can be set at:

  • £10,000 to £30,000

It provides a lump sum of cash in the event that your child:

  • dies within 90 days of an accident 

A lump sum can be paid if your child is diagnosed with one of the following serious illnesses or injuries:

  • bacterial meningitis
  • blindness
  • cancer
  • deafness
  • encephalitis
  • loss of hands or feet
  • paralysis
  • traumatic head injury 

How much does Post Office life insurance cost?

Post Office life insurance premiums are calculated on an individual based on:

  • Your age at the start of the policy
  • Whether you smoke
  • Your lifestyle
  • Your health
  • Your family history of health
  • Your occupation

Your life insurance premiums will also be determined by:

  • The type of life insurance you choose
  • The term that you select
  • The amount of benefit you select
  • Whether you choose to add children's cover or critical illness cover

Post office life insurance quotes won't take account of your health, lifestyle and occupation until your application has been fully assessed. The cost of your life cover could go up depending on how you answer the questions in your application.

Depending on your age, you may opt for Over 50s life insurance which will not ask about your health. However, you can end up paying more into these types of policies than they eventually pay out, depending on how long you live. Speaking to a specialist life insurance adviser* can help you to work out the most cost-effective life insurance solutions.

Post Office life insurance reviews

Defaqto rates the Post Office Life Insurance With Optional Critical Illness and Children's Cover, 3 stars. A 3-star rating with Defaqto represents a product that "provides an average quality offering".

An average quality offering signals that there are better products available to buy, ones that may present better value for money.

Compare Post Office Life insurance with the best and cheapest life insurance

When buying any type of financial product, it is wise to search the market to maximise benefits and minimise costs. The Post Office is only able to provide one price and one type of product for each type of life insurance so your ability to compare products for price and quality is diminished by taking this route.

You can search the market for the best price using comparison websites but they are limited in guiding you to the life insurance policies that will give you the best value for money. Not all life insurance policies are the same, especially when it comes to critical illness cover, as some insurance policies provide more opportunities to claim than others. So, opting for the cheapest without understanding the differences is not the wisest thing to do.

Having researched the market extensively and compared many products, we understand that different life insurance policies will suit different people. So, it is very helpful to speak with a specialist life insurance adviser who will understand your personal circumstances and select the best and cheapest life insurance to suit your needs.

A life insurance specialist has access to the whole market but is also very knowledgeable about the terms and conditions that set particular life insurance apart. Insurance companies also have different guidelines around how they assess your health and lifestyle - some are more lenient than others and your adviser will point this out.

We suggest that you arrange a call with a life insurance specialist* to explore all of your options before you buy life insurance. You don't have to buy the product they recommend but if you do, as a Money to the Masses reader, you can receive up to £100 cashback if you do.

 

If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. This link can be used if you do not wish to help Money to the Masses and do not wish to qualify for the cashback referred to in the article