The shares handed out, a minimum of 225 per policy, will also depend on the value of policies in force with Colonial Mutual. Analysts estimate each share is likely to be worth 127p.
The flotation will be the first by a mutual life company's policyholders in the UK.
Colonial said that 90 per cent of its members would be entitled to more than the minimum share allocation, with 50 per cent of policyholders in line for at least 1,000 shares.
Colonial Mutual, an Australian insurer, will hand out the same number of options per member, entitling them to buy a further set of shares at a 15 per cent discount. In addition, the company plans to hold all shares unclaimed by its policyholders in a trust. If they are stillunclaimed by 2001, they will be redistributed among remaining shareholders.