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11 Nov 2019

HSBC launches pay monthly subscription insurance: will it save you money?

Cover for three policies starts from £19.50 a month

HSBC has launched a new subscription insurance deal which allows customers to pick different types of policies for a single monthly fee. But does it offer a cheaper way to buy cover?

The banking giant's new 'Select and Cover' subscription service allows customers to pick between three and seven different types of cover; including travel insurance, mobile phone insurance, gadget insurance and life insurance, from £19.50 a month.

It aims to make buying insurance easier and more flexible and joins the likes of Aviva, which launched subscription-style insurance for home and car cover last year.

Here, we look at how HSBC's Select and Cover service works and whether it's worth buying.

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How does HSBC Select and Cover work?

HSBC's Select and Cover service allows customers to choose between three and seven insurance products for a monthly fee, starting at £19.50.

You can select at least three of the following types of cover: travel insurance, mobile phone insurance, gadget insurance, home emergency cover, life insurance, excess protection and motor breakdown cover.

Each policy covers the policyholder, their spouse, domestic or civil partner and their children up to the age of 18 - or 23 if they stay in full-time education and are living at the policyholder's address outside of term-time.

Once you've selected the range of insurance products you want, you'll have the chance to add and remove one insurance product each year.

To be eligible for the HSBC Select and Cover service you need to be:

  • a UK resident
  • a HSBC UK customer with a bank, savings, mortgage or credit card account
  • 18 or over
  • registered for online banking.

How much does HSBC Select and Cover cost?

The cost of your monthly subscription will depend on how many products you select.

Cover for the minimum of three insurance policies starts at £19.50, which will cost you £234 over a year.

The most expensive subscription option is for seven insurance products, which has a monthly fee of £45.50 per month or £546 per year.

The table below gives a full breakdown of the monthly fee for each of the subscription levels.

No. of insurance optionsMonthly feeAnnual cost

How much could you save?

To work out how much you could save using HSBC Select and Cover it's best to work out which insurances you need and research what they would cost you to buy separately compared to as part of a package.

If for example, you wanted to go for worldwide travel insurance, mobile insurance and breakdown cover you should try and find the cheapest deal you can for the level of cover you need.

In a quick analysis, we found a worldwide annual travel insurance policy including winter sports for a single person for £4.50 a month; RAC breakdown cover (of a similar level as the HSBC plan) for £15 a month and a mobile phone insurance policy for a Google Pixel 3a XL for £11.50 a month.

In this scenario, you would have to pay £31 month or £372 a year for the three separate insurances. So going for HSBC's multi-cover option could save you £134 a year.

How does HSBC Select and Cover compare?

HSBC Select and Cover offers a number of benefits including; not paying interest on your monthly payments, no cancellation fee and a guaranteed price if you choose to renew your subscription after a year.

It's not, however, the first insurance provider to offer these perks and a number of companies have now stopped charging interest to customers who pay monthly and have waived their cancellation fee as well.

One issue that the insurance industry still falls short on is the 'loyalty penalty' - whereby customers who stick with their providers end up paying more than new customers.

Around six million home insurance and car insurance customers are paying as much as £1.2bn more for cover because they decided to stay loyal to their insurance company, according to research from the Financial Conduct Authority (FCA).

The watchdog is consulting on ways to ban the loyalty penalty, which will be published by March 2020.

HSBC Select and Cover does address this issue by ensuring that customers pay a flat fee that only increases if you add more policies. Aviva's insurance subscription service - Aviva Plus - offers a similar fixed-monthly-pricing structure.

Insurers such as NFU Mutual have also taken steps to eradicate the loyalty penalty by rewarding longstanding customers. Currently, existing customers can get a 12.5% discount when they renew for the first time. The discount reaches a maximum of 17.5% after five years of renewals.

Is it worth subscribing to HSBC Select and Cover?

If you're an HSBC customer and regularly purchase multiple insurance products throughout the year, HSBC Select and Cover could offer you a good value way of buying insurance.

But before signing up to the service, it's important to establish whether you need the insurance products on offer. For instance, if you already have home contents insurance, your mobile phone and other gadgets may already be covered by your policy and you may not need to buy stand-alone protection for those items.

Also, it's vital to check whether or not the insurance policies are right for your circumstances. For example, the HSBC Worldwide Travel insurance policy only covers customers up to the age of 70 so if you'd like travel insurance for someone over 70, you'll have to buy extra cover.

It might also be worth considering whether a packaged account, which offers perks like travel insurance, breakdown cover and gadget insurance, as well as a current account, could be a cheaper option.

Three ways to get cheap insurance

With so many different products on the market today, buying insurance can be overwhelming. We've rounded up three simple ways to get cheap insurance that gives you the cover you need.

1) Shop around

Price comparison sites are a great way to see what insurance deals are available and help you make a shortlist of providers which offer the best cover for your needs.

2) Haggle

Haggling is a really useful way of getting a better deal on your insurance policy.

If you're coming up to renewal, finding a better deal elsewhere can give you leverage with your current provider should you wish to stay with them.

3) Read the small print

Be sure to read the terms and conditions of any insurance policy before buying.

Checking over the policy wording will make sure that you not only get the right level of protection but that your excesses are affordable and that you have included any necessary add-ons and extras.

Always remember that once you've signed up for a policy, making a claim for something that's expressly excluded won't be possible.