Sainsbury’s life insurance [2020 review]

Originating in the grocery sector, Sainsbury’s now comprises of multiple brands; Sainsbury’s Groceries, Argos, Tu, Sainsbury’s Home, Habitat and Sainsbury’s Bank.

Sainsbury’s Bank became an official entity in 2014 when it began selling life insurance.

Like all other life insurance policies, the cover they provide protects your family against financial instability if you were no longer around.

Their policies are a white-labelled product of major insurer Legal & General. Effectively drawing on Sainsbury’s brand strength and awareness.

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New customers and life insurance policies

Regardless of whether you’re a customer entirely new to Sainsbury’s, or have existing life insurance with them, you‘ll receive benefits for taking out a new policy.

This differs from many white label products, like AA life insurance and Tesco life insurance, who only rewarded new customers (when they provided life insurance).

Taking out a life insurance policy with Sainsbury’s after February 2017 entitles you to 2 key benefits:

  1. Up to £90 worth of Nectar points
  2. Double Nectar points.

Sainsbury’s life insurance – the benefits in detail:

Sainsbury’s offers 3 types of life insurance which are entitled to all these benefits:

  1. Level term life insurance
  2. Decreasing term life insurance
  3. Over 50 plan (fixed or increasing).

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Level term life insurance

Level term cover provides your loved ones with a cash lump sum pay out after you’re gone.

Monthly premiums are paid, and the value of your sum assured (pay out) holds it’s value during the length of the policy.

The cost of your premiums are also fixed throughout the term of the policy.

Level term policies are commonly used to cover an interest-only mortgage, where the capital borrowed doesn’t reduce, and/or provide an inheritance.

Occasionally, further investigation or information is required before your policy can go live. In this scenario, Sainsbury’s offer a 90-day free accidental death benefit.

This means that if you die within this 90-day period as a result of an accident, your family will receive a pay out.

Decreasing life insurance 

Decreasing term cover often referred to as mortgage life insurance, is commonly used to cover a repayment mortgage.

However, unlike level term cover, here the value of the sum assured reduces over the term, normally mirroring the remaining mortgage balance.

Because the pay out amount reduces over time, premiums are cheaper than that of level term policies.

As with level term life insurance, if more information or further investigation is required to process your application, you’ll receive 90-day free accidental death benefit.

Sainsbury’s over 50 plan

Sainsbury’s over 50 plans last for the rest of your life and are a form of life assurance – meaning a pay out is guaranteed.

The pay out from an over 50s plan is commonly used to fund a funeral and/or provide a cash gift for loved ones.

With all Sainsbury’s over 50 plans no medical information is required. You’re guaranteed to be accepted if aged 50 – 80 and a UK resident for at least 183-days a year.

There’s a 1-year waiting period, meaning if you were to die within the first 12 months of the policy a pay out would not be issued unless death was caused by an accident.

However, if you were to die within the first 12 months of the policy, all premiums paid to date would be returned to your loved ones.

At the age of 90, premium payments cease but cover continues for the rest of your life.

It’s possible to have in place multiple over 50s plans with Sainsbury’s (or namely Legal & General) but the total cash sum of these policies must not exceed £10,000.

Sainsbury’s offer 2 types of over 50s plan; fixed and increasing.

Sainsbury's life insurance from £5Sainsbury's life insurance from £5 a month

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Fixed over 50s plan

With a fixed over 50 plan, the premium cost and sum assured remain fixed throughout the policy term.

Whilst this is great for budgeting (especially if living off of a fixed income pension), it does mean that due to inflation the real terms value of your pay out may have declined.

However, a fixed over 50 plan from Sainsbury’s does allow you to reduce the cost of your premiums (and thus your sum assured) should your financial circumstances change.

Increasing over 50s plan

With an increasing over 50s plan, your premiums and sum assured are reviewed annually and adjustments made accordingly.

On a yearly basis, your sum assured is reviewed in line with changes to the Retail Price Index (RPI). This means that the value of your policy doesn’t decline as a result of inflation.

However, your premiums will also be reviewed annually and will increase by 1.5 times the change in RPI to account for the increased sum assured.

The average cost of a funeral has risen by +122% over the past 15 years, which is significantly higher than the current rate of inflation.

Therefore, even though your cover level is adjusted, it still may not cover the full cost of your funeral should rates continue to rise at the same pace.

It’s possible to decline the increase to premiums and sum assured upon annual review, however, this does remove the option for a further increase in the future.

As a result, your policy may be of less value dependant on the ongoing rate of inflation.

Life cover with Sainsbury’s

Whether you opt for a level term, decreasing term or an over 50 plan, there are certain characteristics all Sainsbury’s policies share.

Starting from only £5 a month, Sainsbury’s offer a very competitive edge with regards to pricing.

However, premiums are calculated the same as other providers, taking into account your age, smoking status, medical history and lifestyle choices to determine the cost of premiums.

This differs slightly with their over 50 plans which only takes into account your age and smoking status when determining the cost.

Their guaranteed age acceptance has the upper limit of 80 which is slightly lower than most providers which offer guaranteed acceptance up to 85.

Finally, like most other providers, all Sainburys life insurance policies come with free terminal illness cover once the policy has been in place for 2 years or more.

This means that if you were diagnosed with a terminal illness and given less than 12 months to live, you could receive an early pay out.

This money could be used to fund private healthcare, make necessary adaptations to your home or simply enjoy your time with your loved ones.

Sainsbury’s also offer terminal illness cover on their over 50 plans which is not something offered by most other providers.

Joint life insurance with Sainsbury’s

Both Sainsbury’s level and decreasing term policies are available as joint cover, meaning you can insure two lives under one policy.

Generally speaking, taking out a joint life insurance policy is approximately 25% cheaper compared with two single policies.

However, a joint life insurance policy will only ever pay out once, normally upon the first death.

This leaves the surviving partner unprotected and potentially having to seek new cover whilst older, (which is likely to be more expensive).

Depending on the circumstances, if both partners were to die simultaneously, a joint policy may not provide a large enough pay out to cover the loss of both partners. For example, if they were parents.

One pay out may not be able to clear the mortgage and/or fund your family’s existing lifestyle, impacting their quality of life. Causing unnecessary stress at an already emotional time.

Unlike many joint policies, Sainsbury’s allow the cover to be split if circumstances were to change and partners were to separate.

In this instance, many insurers would require you to cancel the joint policy an arrange completely new cover.

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Making a claim

When the time comes and your loved ones need to make a claim on your policy with Sainsbury’s they’ll be given all the support they need.

Your family will be put in touch with a Samaritan-trained claims officer from Legal & General who are trained to advise at this difficult time.

They’ll be assigned a dedicated member who’ll deal with their case and provide guidance through every step of the claims process.

Critical illness cover with Sainsbury’s

Critical illness cover provides an additional level of cover if you were to be diagnosed with a serious, yet non-terminal illness. This add-on is available with all Sainsbury’s policies.

Whilst critical illness cover does cost more, it also provides cover for your children from 30 days old to 18 years (21 if they are in full-time education) should they be diagnosed with a serious illness.

Like terminal illness cover, critical illness cover will provide you with a lump sum pay out upon diagnosis of a specified list of illnesses.

This pay out could be used to fund private treatment, cover the loss of earnings or make necessary adaptations to your home.

The policy will also pay £5,000 if you’re admitted to the hospital as a result of a serious accident and required to stay at least 28 days.

Sainsbury’s life insurance calculator

There are a number of ways to determine both how much life insurance you require and how much you can afford each month.

Sainsbury’s offer a life insurance online calculator to help you determine the level of protection you require; however, these can be fairly inaccurate.

Life insurance quotes are highly dependent on personal factors such as medical history and lifestyle, therefore the figures derived from online calculators can be misleading.

To avoid disappointment, it’s best to speak to an advisor who’ll be able to talk you through your options, ask you specific questions and gain all the necessary information to provide you with a personalised quote.

Compare quotes from the major insurers » Save money

Did you know policies can differ significantly in price depending on the provider?

This means you can save yourself money simply by comparing multiple quotes.

Whilst Sainsbury’s life insurance may appear appealing, it’s essentially cover provided by Legal & General.

In fact, many other brands white label policies from them, not to mention Legal & General themselves supply policies directly.

It’s highly likely each of these will provide similar levels of cover, but at slightly different prices – making it essential to compare quotes from multiple providers.

A life insurance broker can help you save time and money.

An FCA registered broker, like Reassured, can carry out this comparison on your behalf.

Allowing you to compare the leading life insurance providers to find the best possible policy deal.

And the best bit – our award-winning brokerage service is completely free to use.

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