Insurance giant Aviva have offered Norwich Union customers a lump sum payout of £1,000 it has been revealed today.

Customers who have life covers will be given the opportunity to receive the cash payment on the basis that it forfeits their rights to future payouts from the funds' inherited estates. This could pose a dilemma for many a customer as the total amount estimated from the inherited estate amounts to a tidy sum of 5 billion.

Depending on the size and term of their policy an estimated 700,000 policyholders can expect anything between £400 and £1,000 pounds, whilst a further 220,000 could pocket £3000.

Mark Hodges, chief executive of Norwich Union Life, said: "This is a great offer. We believe that it represents good value for 99 per cent of policyholders and almost all of the cash payments will be tax-free. Most importantly, we recognise that policyholders have a choice and everyone will be entirely free to make their own decision on whether or not to accept the offer."

Aviva sounded a note of caution however stating that any further distributions aside from the offer s were unlikely 'especially in the next few years'.