Tesco life insurance is no more, (what are the alternatives?)
Unfortunately, in 2017, Tesco decided to withdraw from the life insurance industry and stop offering policies to new customers.
Fellow supermarket giant Asda has since followed suit, removing their life insurance.
But all is not lost…
There are still a huge number of providers offering a wide range of products; one of which will meet your needs.
In this article, we’ll run through the different characteristics of Tesco life insurance and what they mean.
Highlighting the good and the bad aspects, helping you find your perfect life insurance cover.
Existing Tesco life insurance customer?
If you’re an existing Tesco life insurance customer there’s no need to worry.
All Tesco life insurance policies were underwritten by FCA regulated third-party companies.
Simply identify the relevant one to you and contact them directly with your policy details.
Information on the various providers Tesco have used can be found at www.tescobank.com
Why Tesco life insurance?
As one of the UK’s largest brands, Tesco are recognised by the public for their excellent customer service and reliability.
It was these elements of their brand, coupled with their awareness, which resulted in so many people looking to Tesco when arranging life insurance.
However, it’s important to remember that Tesco life insurance as with Sainsbury’s was a white label product. The actual protection was underwritten and provided by a third-party insurer.
Whilst usually one of the insurance market leaders, the particular provider used changed throughout Tesco’s time in life insurance.
At Reassured, we compare a wide range of the UK’s leading providers to secure you the best possible deal.
We’ll not only compare those previously provided through Tesco, but also others to get you the most cost-effective cover.
Types of Tesco life insurance
The range of life insurance policies available in the market is extensive, however, Tesco only offered three:
These are typically the three most common policies, and all involve paying a monthly premium.
Level and decreasing term policies provide cover for a pre-defined number of years (the term) and pay out if you die during the policy term.
Whereas an over 50s plan lasts for life, guaranteeing a pay out when you die.
This highlights the distinction between life insurance (if you pass away) and life assurance (when you pass away).
The pay out sum associated with both level term and over 50s life insurance remains fixed throughout the policy.
In contrast, the pay out from a decreasing term policy reduces over time, making it well suited to protect a repayment mortgage.
We offer a greater range of policy types
But how do these policies differ?
Whilst over 50 plans don’t require any medical information, whole of life can offer a larger sum assured, as the medical information required helps to reassure the insurer of the risk you pose.
Family income benefit provides on-going tax-free monthly payments to your family following your passing, as opposed to a one-off lump sum.
Using our free broker service, we’ll provide you with all of the information needed for you to make an informed decision on the right policy.
Saving you valuable time and money by comparing multiple quotes.
Over 50 Tesco life insurance
As mentioned above, Tesco previously offered over 50 life insurance.
These policies provide cover for life and don’t require you to declare any medical information to ensure acceptance.
Tesco offered guaranteed acceptance between the ages of 50-80 which is commonplace, however, some policies offered through Reassured will offer the upper threshold of 85.
It’s also common for over 50 plans to cease premium payments at a certain age, whilst allowing your cover to remain valid for life.
With Tesco, for example, once the policy has been in place for 30 years or after your 90th birthday (whichever comes first) you’ll no longer be required to pay premiums.
The qualifying period for this benefit varies between insurers, making it important to compare policies to ensure you’re receiving the perfect cover.
The cost of Tesco life insurance
Like all forms of term-based life insurance, the cost of your Tesco premiums were calculated using certain key information:
- Type of cover
- Amount of cover (sum assured)
- Medical wellbeing/history
- Smoking status
This helps estimate the likelihood of a claim and the cost of premiums are determined accordingly.
Tesco offered policies starting from as little as £5 a month, although this would heavily depend on the factors above.
They also offered fixed premiums, meaning that the price you pay each month would never change.
As opposed to reviewable premiums, which may be cheaper at first but which are subject to possible future price rises.
At Reassured, all policies we provide come with fixed premiums.
We offer cover from as little as 20p a day and can compare multiple quotes on your behalf (for free).
Joint Tesco life insurance
On average, taking out joint life insurance saves you around 25% on the cost of your premium.
However, importantly, only one pay out will ever be made, usually upon the first death.
Tesco life insurance, however, offered a ‘replacement benefit‘.
This means that if the first death occurred before the surviving partner turned 55, they could take out a new policy without further underwriting if done within 90 days of the claim.
This is beneficial because it doesn’t leave the remaining partner without cover and having to secure a new policy at an older age.
Also offered through Tesco was a ‘separation benefit’.
This meant that in the instance of a couple separating whilst having joint cover, they could split it into two single policies.
The premium would be adjusted accordingly, but it does mean that further underwriting wouldn’t be necessary.
These benefits are not very common within life insurance and if they’re important to you, you should discuss them during the application.
Tesco life insurance with critical illness
As with most policies, Tesco life insurance offered the chance to purchase critical illness cover at an extra cost.
This means that if you’re diagnosed with a life-changing, but not terminal, illness you can make a claim.
Tesco’s critical illness cover acted as a standalone product, meaning that it was possible to obtain two payouts; one on your critical illness and another on your life insurance.
However, this could become rather expensive, as you’ll have two forms of cover in place, with two premiums two pay.
Other policies offer the opportunity to add critical illness as part of your life insurance, however, this means that only one pay out is made.
This option will be cheaper than having two standalone policies, but if you make a claim after falling critically ill your policy expires.
Tesco life insurance with terminal illness
Nowadays it’s commonplace for life insurance policies to come with terminal illness cover as standard; Tesco life insurance was no different.
This means if you’re diagnosed with a terminal illness and predicted to pass away within 12 months you can make an early claim.
An early payout could be used as you wish; to settle your finances offering you peace of mind, make necessary home adaptations or simply to enjoy with your loved ones.
All policies provided through Reassured come with terminal illness cover at no additional cost.
Tesco’s life change benefit
Most life insurance policies come with the opportunity to invoke a special events option.
This means that in certain circumstances you can increase your cover without the need for additional underwriting.
For example, buying a larger house or extending the family. At Tesco, this was referred to as a ‘life-changing benefit‘.
With one of their policies, it was possible to invoke this benefit and increase your cover by 100% or £200,000 (whichever was lower) without the need for additional underwriting provided you were under 55.
Proof of your life change would be required, and you must have applied for the benefit within 90 days of the change taking place.
Tesco’s policies provided cover until the age of 91, but if the life-changing benefit was invoked, the policy terms would change, and cover would cease at 70.
As discussed, most life insurance policies offer the ability to make changes to your policy in the occurrence of certain events.
The specific terms, however, will differ between insurers.
Using a life insurance broker, like Reassured, allows you to discuss the terms of the different policies available, ensuring you get the right cover.
Free cover for Tesco life insurance parents
One, seemingly nice benefit with Tesco life insurance when it was available was the £10,000 free cover offered to parents until their child turned 1.
This deal isn’t exclusive to Tesco and is still achievable through policies offered by Aviva and the Post Office.
However, whilst this may seem like a good idea, for the large majority of families a pay out of this size is unlikely to be sufficient to cover the loss of a parent.
As a result, it’s best to arrange life insurance for the required cover amount as soon as possible after your little one is born.
This’ll ensure your loved ones have the level of protection required.
Also, the sooner (younger) you are when arranging your life insurance, the lower your premiums will be.
Tesco life insurance summary
Whilst a super-brand, Tesco life insurance offered very little which can’t be obtained through other insurers.
Throughout their period in the life insurance industry, they used a number of third-party insurers to underwrite their policies.
Some aspects were commonplace in the industry, whilst they also offered a number of specialist benefits such as the replacement benefit and free cover for parents.
Ultimately, it’s always best to ensure you obtain the right cover to meet your specific needs, as opposed to buying cover based on brand recognition.
Compare quotes » Save yourself time and money
The terms of a life insurance policy, as well as the cost of the premium, can differ significantly between insurers.
As a result, to ensure you get the right cover at a price you can afford, it’s essential to compare quotes.
At Reassured, we’ll carry out this comparison on your behalf, saving you both time and money.
We can also help with the application process and write your policy into trust, to avoid 40% inheritance tax and probate.
And our award-winning broker service is 100% free to use.
Simply get in touch today to start your personalised life insurance quote.