How To Earn Cashback On Insurance Premium Payments

Insurance premiums can often be high, costing several hundreds or thousands of dollars, depending on your payment frequency and level of coverage. They also tend to occur on a regular basis, making them a prime candidate for earning credit card rewards like cashback. 

Unfortunately, things are not that straightforward. While you can use some cashback credit cards to earn cashback on your insurance premium payments, there are a few things you’ll need to look out for.

Earning cashback on insurance premium payments is not as easy as earning cashback on other retail transactions. This is because your insurer may not accept credit card payments; in this case, you’ll have to pay through a payment platform to bypass this restriction. 

Another potential obstacle is that your card issuer may exclude insurance premiums from earning rewards. This is a fairly common occurrence, and you can check the exclusions under your credit card terms and conditions to see if this applies to you.

Specifically, you can look up the following Merchant Category Codes (MCC). Such transactions are typically excluded from rewards by many card issuers. 

• MCC 5960 (direct marketing insurance services) 

• MCC 6300 (insurance sales and underwriting)

But fret not, there are some credit cards that recognise insurance premium payments as eligible for rewards. You can pay your insurance bill with such cards to earn cashback on your premiums. 

The following list of credit cards grant cashback on insurance premium payments. If your insurer accepts credit card payments, you can use these cards to pay your premiums and earn cashback. 

Both the UOB Absolute Cashback Card and the American Express True Cashback Card offer unlimited cashback with no minimum spend. This means you can use them for insurance bills of any size, and you’ll earn 1.7% and 1.5% cashback, respectively. 

As for the Maybank Platinum Visa Card, you’ll need to spend at least S$300 per month each quarter in order to earn cashback at a rate of 3.33%. Cashback starts at S$30 per quarter; and goes up to S$100 per quarter for S$1,000 monthly spend quarterly; and S$200 per quarter for S$2,000 monthly spend quarterly. 

There are several payment platforms that allow you to earn credit card rewards on transactions that are excluded by the card issuer. 

By paying through these platforms, your payments are coded under another MCC, thereby rendering them eligible for rewards. It’s worth noting that some card issuers specifically exclude transactions from such payment platforms from rewards – if that’s the case you’re back to square one. 

Assuming that’s not the case, should you still use a payment platform to earn cashback on your insurance bill? To answer that, let’s take a closer look at some of these payment platforms.

The main issue with using a payment platform is the service fee, which can go up to 2.6%. 

If this exceeds the cashback you can earn on your insurance premium payment, then you will essentially be paying extra for nothing.

This method can only work if the value of the cashback you get from your insurance bill is higher than the service fee you have to pay. As such, this method may be more viable with rewards points credit cards or air miles credit cards, and not so much with cashback credit cards.

However, do note that there are exciting offers you can receive, especially with CardUp. CardUp personal account members with a Visa card can expect a 1.85% fee on all domestic recurring payments instead of the usual 2.6%. For one-off payments, CardUp personal account members who are also Visa, Mastercard, or China UnionPay card holders we can enjoy a reduced fee of 2.25%.

If you are a CardUp personal account member and a Maybank Platinum Visa Card cardholder, you are eligible for the most exciting offer of all: a highly reduced 1.73% fee on all domestic payment types. Valid until 1 July 2024.