What’s the catch?
As with all insurance products, the main thing to watch out for are the exclusions, terms and conditions – particularly if you are reaching the age of 70.
According to Defaqto, 11 of the 30 packaged accounts on offer exclude travellers over the age of 70, and only eight cover you up to the age of 79.
You also need to think about any medical conditions you may have that could make your insurance more expensive or, in the worst case scenario, completely useless.
“This includes all sorts of things you may not think of,” said Sarah Coles of Hargreaves Lansdown.
“Think past broken bones, and conditions like asthma and depression. In some cases they may refuse to cover you altogether, which might render the packaged account a waste of money.”
Make sure the deal you go for covers everything you need. If you sometimes drive in Europe, check the breakdown cover is not limited to the UK; if you spend time in the Caribbean, make sure your travel insurance is worldwide.
“Realistically, it’s a case of going through the account details with a fine-tooth comb to work out whether it is worth it,” said Ms Suter.
“You need to ask yourself: ‘Do I need these perks?’, ‘How much would they cost me elsewhere?’, ‘Do I already have cover?’ and ‘Does it actually cover everything I need?’.”
How to ensure a packaged account is good value
Before signing up for a packaged bank account, it’s worth looking back over the past few years to see how much you spent on travel insurance, phone insurance and breakdown cover.
By getting an idea of how much you already spend on these services annually, you can use the figure to set the maximum amount you should spend on a packaged bank account. Only consider the insurances that you would definitely buy.
If you can get the same cover or better from a packaged bank account, which costs the same or less than you already typically spend, then it could be a good deal for you.
In some cases, you can make huge savings. For example, the Virgin Money Club M account costs £150 a year, and its travel insurance includes worldwide cover, cruises and winter sports for two adults and up to four children.
If you usually go on a summer cruise holiday and a winter ski holiday as a family of six each year, you could spend a minimum of about £450 a year on travel insurance alone, according to MoneySuperMarket.
However, if you are more likely to spend a week in Europe and a long weekend in the UK each year, you could get cheaper travel insurance elsewhere.
As travel insurance costs increase as you get older, the travel insurance perks that come with a packaged bank account can be very cost-effective once you turn 70 – as long as the policy covers older travellers. Nationwide’s FlexPlus and the Halifax Ultimate Rewards accounts, for example, only cover travellers up to the ages of 69 and 70 respectively.
But there are still deals available for the over-70s. For example, The Co-operative Bank’s packaged accounts covers you up to the age of 79 and costs £180 a year. A couple who are both 75 would pay about £250 for a worldwide annual multi-trip policy, according to MoneySuperMarket, so the packaged account is worth it.
