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HSBC UK Select and Cover


Pros

Cons
Easy to buy...Term only cover (for now).
Innovative subscription insurance service...Low sums insured.
...and to understand.Is subscription the way forward or a gimmick?

The Product

Select and Cover is a new flexible insurance product that offers up to seven switchable covers in one monthly subscription.

HSBC UK customers can choose a minimum of three and a maximum of seven of the following types of cover: Mobile Phone; Gadget; Home Emergency; Life; Excess Protection; Motor Breakdown, and Travel, from £19.50 per month.

If their needs or circumstances change, customers can add or remove one option during the year, as long as they maintain a minimum of three, and can change all their options once a year on the policy anniversary. Combining covers can reduce the aggregated cost, thereby saving customers money when compared to purchasing individual policies.

Select and Cover is a pay monthly service and customers can cancel at any time without penalty. Each policy covers the customer, their spouse, domestic or civil partner and their children. That is, children up to the age of 18 (or 23 if in full time education) and living at the policyholder’s address outside of term time.

Market research conducted by HSBC UK showed convenience and flexibility were the two main drivers for insurance customers and identified a strong desire for subscription type services instead of fixed contracts, HSBC says.

Select and Cover is available online to the six million HSBC UK customers who are registered for online banking. Pricing options are:

* Three Options: £19.50pm
* Four Options: £26.00pm
* Five Options: £32.50pm
* Six Options: £39.00pm
* Seven Options: £45.50pm

The Starter Life option pays a £15,000 lump sum payment in the event of the death of the customer or their partner and a £5,000 lump sum payment in the event of the death of a child. The maximum age is 50 at outset and cover lasts until the policy anniversary after reaching age 50.

Exclusions include suicide during the first 12 months, and death which occurs in the first 12 months as a result of a medical condition or related symptoms the deceased person knew about at the cover start date, whether the condition had been diagnosed or not. If a claim is made on the customer’s death, the policy ends automatically and no more premiums will be payable. Otherwise a maximum of two claims can be made within the period of cover for the death of a partner.

What They Say

CEO Mark Hussein said: "Select and Cover will redefine the way our customers buy insurance. Its subscription-based model reflects our aspiration to provide customers with innovative ways to both buy and use our products. "Select and Cover complements our existing products by broadening our range, enhancing the speed and convenience of the application process, making insurance more appealing and accessible to customers. Its rationale is very much in keeping with our business strategy to improve access to insurance and enhance our digital capabilities, enabling us to evolve and grow within the changing insurance landscape."

What We Say

"A subscription based insurance package is quite a new concept, fitting in well with other consumer services such as Netflix, Sky and Amazon for example. "HSBC’s model includes a life insurance option, although could easily be expanded to include other protection covers too. "The Starter Life option is easy to buy, covering partners and children too, but is relatively limited. The sums insured are low and cover is only available to the under 50s and stops at age 50 and a bit too. "However, the concept has merit, and it will be interesting to see how far HSBC develops it. Could subscription-based services be the future for protection insurance? It seems unlikely just now but then how many of us expected to have quite so many other subscription services as we do? Time will tell…"