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CGU says it sets lower premiums for Tesco

CGU has admitted it sets higher premiums for term insurance products sold by IFAs than it does for Tesco Personal Finance.

The life office says independents would have to sell term insurance for an average of 16 per cent higher than a Tesco salesperson would.

It now plans to notify IFAs that they can drop below the minimum rate it has set.

The company says the rates Tesco charge are generally lower because they cut their commission rates and also help with the marketing costs involved with the product.

A CGU spokeswoman says: “If an IFA wants to waive the commission level and dip below the premium level we allow them.

“We would not have a problem with that. We will inform IFAs of this, but we have not in the past.”

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