Tesco Life Insurance Review 2023

From its lowly beginnings in 1919 as a group of market stalls, to its current status as the UK’s largest retailer, Tesco’s rise has been meteoric.

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From its lowly beginnings in 1919 as a group of market stalls, to its current status as the UK’s largest retailer, Tesco’s rise has been meteoric. Based in Welwyn Garden City, Tesco has expanded globally since the 1990s and operates in 11 different countries.
Since the 1960s Tesco has diversified its operations, making inroads into other retail areas, such as clothing, petrol, telecoms and financial services.

Tesco Bank Life Insurance is a financial product that offers you peace of mind by providing an agreed level of financial support to your family if you die during the term of the policy.

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Tesco Bank life insurance is provided by Aviva Life & Pensions UK Limited and is available to UK residents (excluding the Channel Islands and the Isle of Man) between the ages of 18-85.

It provides a cash lump sum to your beneficiaries if you die during the term of the policy, and terminal illness cover comes as standard. This means that if you’re diagnosed with a terminal illness (less than 12 months to live) before the last 12 months of your policy, the lump sum will be paid out sooner.

Which life cover to choose

How much you pay in monthly premiums is based on personal circumstances and the amount of cover you require.  Policies can last between 5-50 years, but must end on your 91st birthday. If you’re looking to purchase cover for a longer period it’s worth considering the effect of inflation on your lump sum pay-out. What may seem like generous provision at the time can turn out less than adequate if not reviewed at regular intervals.

As with all life insurance products in the UK, Tesco life cover comes with a 30 day cooling off period, where you can cancel your cover and get your money back if you change your mind.

Level cover provides a cash lump sum upon the policy-holder’s death, and can help pay off an interest-only mortgage. The amount of this pay-out stays the same throughout the policy term.

Mortgage decreasing cover is designed for repayment mortgages, where the lump sum paid decreases in line with the amount owed.

The Tesco Protection Promise

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Tesco life insurance offers up to 90 days of free cover, from the date your application is received. However, if your application is postponed or rejected underwriting cover ends immediately.

As with all life cover, The Tesco Protection promise also becomes invalid if you’ve lied in your application, or neglected to keep them updated with any changes in your medical condition since applying.

Tesco Life Cover For Homeowners

Tesco life insurance policies with decreasing cover include a Repayment Guarantee, at no extra cost. This provides a guaranteed lump sum upon your death that can be used to pay off the outstanding mortgage amount covered in the policy, provided that:

  • The policy doesn’t end before your mortgage.
  • The annual mortgage rate is less than 10% when cover is taken out.
  • Any difference between the life cover amount and mortgage debt is solely the result of higher interest rates than the ones used in the original calculations.

Tesco’s Protection Promise provides free life cover from the moment you exchange contracts until your house purchase is complete. Should you die during this period, you will receive either £1,000,000, the amount of cover you applied for, or the final purchase price of the house – whichever is lower.

Life insurance for couples

Joint policies are available for partners, spouses or civil partners, and can work out cheaper than buying two single policies – although it’s worth bearing in mind that policies only pay out once, and obtaining a single policy later in life can be more expensive.

With this in mind Tesco joint life cover offers certain benefits as standard, to cushion you from some of the unexpected changes that life can bring.

Replacement Benefit allows the remaining policy-holder to take out a new single policy upon the death of their partner, without underwriting. It provides cover for the original sum insured, or £50,000 – whichever is lower. There is an age limit on Replacement Benefit, which is set at 55.

Separation Benefit enables joint policy-holders to divide their policy into two single ones (either level or decreasing cover) if they separate. Once again, there is an age limit of 55 on claiming this benefit, and evidence of the separation will have to be provided.

Added flexibility with Life Change Benefit

If a policy is accepted on standard terms, it comes with Tesco Life Change Benefit. The aim of Life Change Benefit is to ensure that your family’s current lifestyle isn’t disrupted following your death. It allows you to take out extra cover without providing any more underwriting information, and can be useful for dealing with significant life changes and events, such as getting married or entering into civil partnership, divorce, home purchases and improvements, salary increases of 20% or more and children starting at university.

Life Change Benefit makes it possible to increase your cover by either 100% or up to £200,000 – whichever is lower.

Once again, if you want to use this benefit, it must be done within 90 days of the life change event, and evidence must be provided of what has changed.