Stop! Don’t buy that insurance policy. You might be covered already…for free

Adam Edwards 23rd May 2023 No Comments

Reading Time: 6 minutes

Could you have insurance policies you don’t know about?

Keeping track of savings, investments and insurance policies is getting increasingly difficult thanks to digitalisation and companies going “paperless”.

The big financial institutions are holding billions of pounds in old accounts that customers have forgotten about. This is especially true of banks, building societies and pension funds, which have thousands upon thousands of accounts whose owners they cannot trace.

But it’s not just cash that is being “lost” in this way. As a nation, we’re also wasting billions on insurance policies we don’t know we have, and spending our hard-pressed dosh on new policies for things we’re already covered for.

There are a whole range of ways in which you could accidentally “double up” on insurance. Many home insurance policies, for example, come with added perks, like family travel insurance or mobile phone cover. It’s quite easy to forget about such “extras” and inadvertently take out separate policies (this is why we at MoneyMagpie suggest keeping a spreadsheet listing all your policies – and when they expire).

Many employers also offer their staff an array of perks and discounts, which are often poorly communicated to the staff. So, do ask your boss what your contract entitles you to, even if you are not a full-time or permanent employee; freelancers, temps and sub-contractors can sometimes be entitled to the same perks as permanent employees, especially if those “perks” are necessary for the job. For example, if you are expected to travel for work, there’s a fair chance you may be automatically covered by the company’s travel insurance or car breakdown cover irrespective of whether you’re a permanent member of staff or not.

Life insurance

The main types of cover you could be insured for without your knowledge, however, are life insurance and death-in-service cover.

According to GoCompare, there are a whopping 2.9 million life insurance policies that are at danger of going unclaimed in the UK. Again, this is likely due to the fact that these life insurance is often taken out by employers without the knowledge of the staff.

Even more incredibly, of the people that are aware they have a life insurance policy, 18 per cent have never told a relative that they will be due a payout when they die, and 71 per cent haven’t mentioned it in their will. Make sure you speak to your relatives about this.

It’s not just your employer who may have taken out a life insurance policy for you. There’s a strong chance you could have a policy if you’re a member of a trade union, too. Anybody who has signed up with any of the main trade unions, including Unison, Unite, the GMB and the RMT, is entitled to at least a £5,000 lump sum for their loved ones in the case of an “accidental death”. Its members are also able to benefit from discounts on everything from home insurance to travel cover via Union Insurance.

Others, like the teachers’ union Nasuwt, go even further for its members, offering free personal accident insurance and home fire-and-theft cover too. If you’ve never been a member of a union, but used to work for a government-run agency of business, like the NHS or the railways, you may be entitled to many of the same benefits as current employees.

One of our readers, a retired NHS receptionist, told MoneyMagpie that she had successfully applied for a ‘Blue Light Card’ which gives her (and current nurses, soldiers and carers) discounts on everything from travel insurance to the holiday itself.

If you’ve checked if you have cover, to no avail, don’t fret; you don’t have to spend anything to sign up for some types of insurance. Most credit unions, for example, offer free life insurance when you open a savings account or take out a loan with them.

Union life insurance

Unify and Discovery credit unions will give your next of kin an extra 25pc on top of your savings if you die before turning 80. If you die before your 65th birthday, they will double what’s in your savings pot.

The Pennine Community Credit Union also has a similar scheme in place for members.

While Serve and Protect Credit Union offers free life insurance of up to £25,000 on savings and loans.

Insurance from banks

You might also want to consider switching high street banks to a paid-for option that comes with insurance policies like travel insurance, phone insurance and car-breakdown included (the savings will more than offset the small monthly fee you pay to the bank).

Virgin Money’s ‘Club M Account’, for example, comes with worldwide family travel insurance (for under 75s only), UK car breakdown, and mobile, tablet and laptop cover as part of its £12.50 monthly fee. The policies would cost up to £500 a year, if bought separately.

Nationwide’s £13-a-month ‘Flexplus’ account includes worldwide travel insurance for the whole family, UK and European breakdown cover through the AA, and mobile phone insurance for the entire family. For an extra £65 a year, you can even upgrade the travel insurance to cover people over 70.

Lloyds Bank’s ‘Silver’ account also costs £13 a month, but you can get £3 of that back if you pay £2,000 or more into your account on any given month. As a ‘Silver’ account holder, you receive UK and European family travel insurance (up to 65 years), AA breakdown family cover in the UK, and worldwide mobile phone insurance. You’ll also get to choose one other perk, like a free Disney+ subscription, cinema tickets or a monthly magazine subscription.

Monzo’s ‘Premium’ account gives you worldwide family travel insurance and mobile phone cover on up to six devices, among other perks, for its £15 monthly fee.

Meanwhile, the Co-operative Bank’s £15-a-month ‘Everyday Extra’ account includes mobile phone insurance, worldwide travel insurance up to the age of 79, and UK and European breakdown cover with the RAC for named account holders. To buy the various insurance policies individually would cost you in the region of £400 a year.

For £17 a month, you can get worldwide travel insurance for you, your partner and any kids under 18 through the Halifax ‘Ultimate Reward’ current account. It also includes AA’s ‘Breakdown Family Cover’, mobile phone insurance for the account holder, and home emergency cover, too.

If you sign up for HSBC’s ‘Premier Account’, on the other hand, you’ll get worldwide family travel insurance up to the age of 69 – at no extra cost. To apply, however, you have to have £75,000 a year in income as well as a mortgage, investment, life insurance or protection product from the bank.

Health insurance

Can’t afford to pay for a bank account to get free travel insurance? Contrary to popular belief, you can still get free or reduced healthcare in mainland Europe despite Britain no longer being in the European Union (EU). In fact, far from scrapping the European Health Insurance Card system, we basically just renamed it.

It’s now known as the UK Global Health Insurance Card, and gives you all the same benefits as your old European Health Insurance Card, which, FYI, is still valid, as long as it’s in date. If it’s not, apply for a new card here.

Delayed flight insurance

You’re also entitled to compensation for delayed or cancelled flights under what is essentially a free “insurance” scheme that the airlines are signed up to. The amount you receive depends on how long your delay was and the route of the flight you took (or didn’t take, as the case may be), but you could be sent up to £520 per person.

For more information, or to apply for a rebate on a delayed or cancelled flight, click here.

It’s not just airlines with such fallbacks. There’s a similar “insurance” system for delays to train journeys that all the railway operators are signed up to. Click here.

Conclusion

In fact, there are lots of such “insurance” policies we don’t realise we have as UK consumers. One that most of us are probably vaguely aware of, is that savings are secure to the tune of £85,000 under the Financial Services Compensation Scheme (FSCS). Again, this is basically a form of insurance, and one that many people didn’t know they had until the run on Northern Rock.

What even fewer people probably know is this cover also extends not only to building societies and credit unions, but also to funeral plans, investments and pensions, too. Best of all, if the company that you have your actual insurance policies with goes belly up too, the FSCS also covers that.

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