Barclays Life Insurance from Aviva
Barclays has simplified its life insurance offering, which is underwritten by Aviva. Now, the plan (which is only available on individual not joint lives) offers a choice of just sum insured and policy term. On death within the chosen term, the level benefit is paid and the policy ends. The policy meets the simple kitemark definition developed by the Sergeant review.
In simplifying the plan, Barclays has stripped out terminal illness and waiver of premium benefits and offers cover up to £500,000 and terms from one to 51 years. Cover is available to UK residents aged 18-68 and cover must end before age 70. Intentional self-inflicted injury and suicide are both excluded in the first 12 months.
To go with the policy, there is an 18 page ‘Your Guide to Insurance for Life Insurance’ (sic), which includes a useful section on trusts, although customers ‘should rely on the advice of their own legal and/or financial advisers’. In addition, the website includes a simple cover calculator that uses a few simple questions and sliders to help determine the sum insured to apply for.
Someone aged 30 looking for £100K cover over 20 years would pay £7.77 a month at standard rates, with the website also automatically including quotes for £125K (£9.04 a month) and £150K (£10.03 a month). Minimum premium is £6 a month.
Comment: Simplicity is generally a good thing so adding simplicity must be even better, right? Well, not exactly. If your car manufacturer took out all the complex computer management in your car it would certainly be simpler, but it would also be slower, use more fuel and be less safe.
That’s a bit like what Barclays has done. The plan is certainly simple – all you have to decide is how much level cover you want and for how long and the website even helps you make those decisions. But wouldn’t you really like terminal illness cover too and what about waiver of premium? And would you recommend someone talks to a legal adviser before writing their policy in trust? Worse, they might simply decide it’s not worth the hassle of setting up a trust (to be fair, far too many IFA clients don’t go the trust route either – but that does not make Barclays’ stance right either).
Ultimately, we applaud Barclays (and Aviva’s) striving for simplicity but we end up thinking that the end result is more a Trabant (remember those?) than a modern Skoda. Both offer simplicity and good value for money, but we know which we’d rather have or recommend to others.
Plus points: Super simple – the only variables are sum insured and term; Meets the Sergeant kitemark requirements; Easy to buy, with instant underwriting for most (80% of customers should get an instant underwriting decision); Inexpensive; Useful online guide and cover calculator.
Not so plus points: A step too far in over simplification?; No WOC or terminal illness cover; No joint life option (although that’s of arguable value anyway); The online guide is not well written in places and the online cover calculator is over simple too, which could result in under-insurance for some).
Website: http://www.barclays.co.uk/insurance.
Rating (max 10): Innovation: 7. Overall: 5. Bronze
Tags: Term; Barclays