Scottish Widows has designed a simple life and critical illness insurance policy that covers you in the event of your death and 24 different illnesses – eliminating the need for complex health questions.
In fact, you can get coverage after answering just seven questions in 20 minutes—instead of the weeks it can sometimes take to get a more comprehensive policy.
The deal, known as Plan and Protect, is currently being rolled out across the UK to more than 1,300 mortgage and protection advisors at Halifax, Lloyds Bank and Bank of Scotland branches.
Clients can be covered up to £500,000, with premiums starting at £5 per month. You will need to take out a mortgage from Lloyds Bank to qualify.
Independent living or critical illness options are also available in addition to the combined package
But is simplicity always desirable when it comes to something as important as life insurance?
Do the reduced costs and speedy process outweigh the benefits of a more comprehensive policy? take a look.
What do financial advisors say?
Rob Harvey, Head of Consulting at Drewberry
‘Given that taking out a mortgage is likely to be the largest financial commitment we will make in our lifetimes, it is very positive to see the protection discussion moved front and center along with the actual mortgage,’ said Rob Harvey, Head of Protection Advisory at Drewberry. . Itself.
We also welcome the simplicity of the product, with its uncomplicated formula and increased transparency.
Perhaps there is room in the market for other insurers to follow suit and simplify the wording of their products when it comes to poor health coverage, especially as it is an area where many people feel confused by the combined bombardment of legal and medical terminology when it comes to policy terms.
“However, while simplistic policies should be welcomed, it is important that they do not affect positive client outcomes.”
What’s on offer?
Scottish Widows offers both life and critical illness insurance, either together or as a standalone policy.
Life insurance comes in different shapes and sizes, with some policies providing coverage until your death, and others being fixed for a period of time, such as the term of a mortgage.
The monthly cost depends on your health, personal circumstances, level of coverage and the type of policy you choose.
Scottish Widows’ offers flat and reducing insurance, which means there can be a fixed payout for a set period of time, or the amount of return will decrease over time like the size of your mortgage.
Moreover, it also offers critical illness coverage, either along with life insurance or as a standalone policy.
Critical Illness Pays a lump sum upon diagnosis of critical illness. In the case of Plan and Protect, you are covered for 24 different critical illnesses.
Keep in mind that if you are diagnosed with an illness that is not covered by the policy, you will not receive compensation.
How does this deal stack up?
The concept of simplified protection products is something service providers have used before, as this is an area customers can often find intimidating and confusing.
In the past, both Sun Life Direct and AIG have attempted to reduce the size and streamline of critical illness plans.
Both companies offer three state plans that cover cancer, heart attacks, and strokes.
Alan Lucky, founder of CI Expert Critical Illness Insurance, said:The Sun Life plan relies on consumers who are attracted by the relative simplicity and resulting low cost.
Alan Lucky, critical illness insurance expert
The design of the Scottish Widow scheme is more closely related to the traditional critical illness model which offers 24 cases plus an additional £5,000 if they are treated surgically for early-stage cancer.
Essentially, Scottish Widows’ new deal is looking to strike a balance between a streamlined product that’s easy for customers to understand and something comprehensive enough to act as an insurance product. How did you do?
“It’s definitely not the most comprehensive policy out there as many of the conditions you might expect to be included aren’t covered, but that’s the trade-off – if you want something simpler, something you usually have to give,” said Kevin Carr, CEO of Protection Review.
Independent living or critical illness options are also available in addition to the combined package.
The offer is available to customers from the age of 18 to the age of 60 with coverage available up to the age of 70. The premiums are fixed throughout the life of the policy.
How much coverage do I need?
Do you need a consultant to buy life insurance?
We often consider buying a life cover online from price comparison websites because it is possible to search the entire market and find the cheapest price in a matter of minutes.
But it isn’t necessarily the best idea to do so. You may not know how much you have to insure yourself, and it is unlikely that the quote will be tailored to your individual circumstances.
At This is Money, we believe it’s worth talking to an advisor if you’re looking for protection, especially if you want more than just life insurance.
However, if you are determined to go it alone, there are plenty of options out there.
You can buy a cover online from a number of price comparison sites. Market Comparison, Confused or Moneysupermarket offer a good selection of products and will quote you based on averages. When you apply directly to the insurance company, they will give you a personalized quote.
Alternatively, you can get a personalized quote online by answering a few basic questions – This is Money has partnered with Cavendish Online to provide our readers with exactly this option, at the cheapest rate anywhere on the market.
You can complete the entire journey online or you can choose to chat with an advisor if you prefer, at any time.
When purchasing insurance, the first thing to think about is how much coverage you need.
You’ll likely want your insurance payments to cover any remaining mortgage, pay for the funeral, and also leave some money to help with living expenses, but the more coverage you get, the higher the price tag.
One of the main things to consider when taking out a life cap is the arrangements you already have.
For example, employers can file a form of death in service, which could be a double of your salary. Built retirement pots can also be passed on to your family if you die.
Check with your employer and pension provider about your benefits before assessing the level of coverage you need.
The counselor will be able to help you find out all this.
How much will I pay?
Life insurance premiums are calculated depending on your history, health, and age, among other factors.
For example, a 40-year-old non-smoker with a clean bill of health can expect to pay between £13 and £22 per month for £100,000 of cover for 25 years.
For the same person, who happens to be a smoker, they can expect to pay premiums of between £18 and £22.
Other conditions such as marital status, occupation, and credit score may also be used to calculate your premium.
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