A&L Savings and Life Cover

warrtydog · 23 October 2007 at 5:09PM

Hi All
Just had this Email from Alliance and Leicester.
This looks a good offer but would like to know what you all think about it.
I'm 55 and have life insurance and no mortgage but they say you can never have too much protection against the unknown things that could occur.
Seems to me you are paying out to get something back but is it worth it???????????

warrtydog

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Save & Protect

Save for now and protect your family's future....

As an existing Alliance & Leicester Premier customer, you can get the best of both worlds with Save & Protect*. Earn a massive 14% gross p.a./AER fixed for 12 months on your savings with Alliance & Leicester when you take out protection from Legal & General to help protect your family’s future.
Save

Earn 14% gross p.a./ AER fixed for 12 months
Make fixed monthly payments of £10 - £250 allowing you to save what you can afford and develop a savings habit. One year term
Payments automatically transferred from your linked Premier or Premier Direct Current Account
At the end of the 12 month term the interest earned will be added to your account and the balance will be transferred into your Premier or Premier Direct Current Account
Find out more about our Premier current accounts

Protect

Protection that you and your loved ones can rely on
A range of cover available to help suit your needs, Life Cover, Critical Illness Cover, Life and Critical Illness Cover, Family and Personal Income Plan or Whole of Life Protection Plan provided by Legal & General

Call us now on 0500 11 77 11 quoting I69 for a no obligation quote.
Or call 0800 68 66 99† quoting INV1W to make an appointment with a Financial Advisor.
Alternatively let us Call you back to make an appointment in your local branch at a time that suits you.
*Save & Protect is only available to Alliance & Leicester customers who hold a Premier or Premier Direct Current Account when purchasing Non-Mortgage Related Life Cover, Life and Critical Illness Cover, Critical Illness Cover, Family and Personal Income Plan or Whole of Life Protection Plan provided by Legal & General Assurance Society Limited. Limited availability.

dave_london · 23 October 2007 at 5:32PM

thats funny - I just got the same email and logged on to post it ... It seems strange thats it's so high...what would stop someone taking out a £250 0% balance transfer for say 3% a pop every month and putting it in this savings account and pocketing the difference?

hotnuts21 · 23 October 2007 at 6:00PM

I would like to know what people think about this as well, it sounds to good to be true!

Aegis · 23 October 2007 at 6:07PM

The catch is that you have to buy the insurance product. If you were already going to buy a (presumably quite expensive) L&G insurance product, then there really isn't much of a catch.

warrtydog · 23 October 2007 at 7:04PM

That's what I thought, that the catch was spending more on Life Cover than you would get back.
As Martin says the banks are out to screw us, not do us any favours but I think a lot of people might be drawn in by this but I think I will probably give it a miss.
They can't afford to pay that amount of interest if there was'nt something in it for them.:T

agal · 23 October 2007 at 7:35PM

The interest rate sounds impressive but it only works out to around £170 after tax on the max £250 per month saving.

littlemissmoney · 24 October 2007 at 12:43PM

I just come here to post about this! I'm very young so I'm thinking a low term assurance might be very cheap for me, maybe just a pounds a month. Even though I don't want the lifecover, if might be worth it to get the 14%. Really I need to get a quote a do some maths.

dunstonh · 24 October 2007 at 1:13PM

I dont know how they can get away with this. Protection is regulated by the FSA and selling protection, under advice, to someone that doesnt need it would be classed as a missale.

That said, if it is an option for those needing protection, then they could get away with it.

However, it should be noted that A&L's L&G tie in is not the whole of market/IFA product. It is a more expensive version and you will lose money on that compared to using the whole of market product.

DeepSporran · 24 October 2007 at 2:55PM

This offering from A&L is not new, though maybe this is the first time they've emailed people about it.

There have been previous posts about it, particularly interesting is this one:

http://forums.moneysavingexpert.com/showthread.html?p=6405107&highlight=save+protect#post6405107

where someone checked out the cost of the same life policy through the A&L site using the 14% offer, and then checked the cost if taken directly from L&G.

It was significantly more expensive through A&L, so (not surprisingly) A&L are clawing back some of the extra interest they give out on the 14% regular saver. This reflects what Dunstonh is saying in his last comment.

As always, you have to do the sums and check if it's worth taking up this offer.

littlemissmoney · 24 October 2007 at 6:03PM

****EDIT: Please ignore this post, I'm talking rubbish!****

I've been messing around with the online quotes system. The minimum quote is £60 a year and the minimum term is 2 years. So this is going to cost you £120. The regular saver will make you approx £180 (after tax) more than a 7% regular saver. So there is £60 to be made here (plus free life cover)... :T :T

P.S. To get the cheapest quote try £10,000 for 2 years. Then increase the amount (not the years) until you hit £60 and it accepts it.

masonic · 24 October 2007 at 8:10PM

littlemissmoney wrote: »

So this is going to cost you £120. The regular saver will make you approx £180 (after tax) more than a 7% regular saver. So there is £60 to be made here (plus free life cover)... :T :T

I'm not sure how you have come by those figures.

I make interest from the 14% regular saver:-
0.14 x 78/12 x £250 x 0.8 (basic rate tax) = £182

and interest from a 7% regular saver:-
0.07 x 78/12 x £250 x 0.8 (basic rate tax) = £91

...and the difference = £91

So, after subtracting the insurance cost, you are down £29.

However, you also have to consider the interest you could have earned on the £120 used to pay for the insurance, which amounts to £6.44 (5.1% net) by the end of the year, meaning...

an overall loss of £35 compared with just using a 7% Regular Saver.

A&L Savings and Life Cover

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