In 1997, The Royal Bank of Scotland (RBS) and Tesco plc, a UK-based global grocery and general merchandise retailer, entered a joint venture, launching Tesco Bank.
In 2008, Tesco acquired the RBS share and became full owner of Tesco Bank. The bank offers credit cards, personal savings accounts, personal loans, an online utilities and insurance comparison site, and various types of insurance, including life coverage. Tesco Bank currently has 6.5 million consumer accounts.
Tesco Life insurance is provided by Friends Life Limited, a leading UK financial product and service provider. Level and decreasing term life insurance policies are available. Level coverage pays a cash sum if the insured dies or is diagnosed with a terminal illness during the policy term, which may range from five to 40 years, subject to a maximum age of 84.
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This benefit is designed to repay an interest only mortgage or provide for beneficiaries, helping them to maintain their quality of life. Coverage and monthly premiums are fixed during the policy term.
Decreasing term life insurance covers a standard repayment mortgage. Also called mortgage life insurance, the coverage level decreases each year roughly in line with a repayment mortgage. Monthly premiums are fixed for the policy term, which may range from ten to 40 years, subject to a maximum age of 84.
Level and decreasing term life policies include a terminal illness provision that pays the cash benefit if the insured is diagnosed with a terminal illness at least 18 months before the term end date. Once this benefit is paid, the policy ends. A policy can be established to insure either a single live or two lives.
With a joint policy, the cash benefit is paid only once and then the policy ends. These policies do not have a cash-in value and failing to pay premiums will cancel the coverage without a refund.
Level and decreasing term policy premiums are based on age, gender, lifestyle, occupation, family and personal medical history, smoking status, and coverage level and term. Additional options available for the level term plan include a special events option for insured younger than age 50 and in good health that allows to increase the level of coverage (through the 55th birthday) upon the birth or adoption of a child, subject to limitations.
An insured who is in good health and younger than 50 will also have the option (through the 55th birthday) to increase coverage or extend the policy term due to an increase in the mortgage. The mortgage increase and extension option is also available with the decreasing term plan. With a level or decreasing term policy, the insured may make changes to the coverage level or policy term.
Critical illness coverage can be added to a level or decreasing term life insurance plan. It pays a cash sum if the insured dies or is diagnosed with one of 35 predefined critical illnesses during the policy term. Critical illness coverage is also available separately.
If this coverage is elected with a Tesco life insurance policy, a benefit will be paid only once, even with a joint policy. Premiums are fixed for the first five years of the policy and are then reviewed annually, at which time they may increase or decrease.
The cash sum benefit from a critical illness plan can be used for many things, including adapting the home to accommodate the medical condition, repaying a mortgage, or to pay household bills. Free critical illness coverage for children, up to £20,000 for each child, is included with this plan.
The special events and mortgage increase and extension options are available for this plan. The policy does not have a cash-in value and if premium payment stops, coverage will end without a refund being paid.
Critical illness premiums are based on age, gender, lifestyle, smoking status, occupation, coverage level, term, and family and personal medical history. More advanced stages of certain types of cancer, severe heart attack, coma, dementia, stroke, Parkinson’s disease, and Alzheimer’s resulting in permanent symptoms are several illnesses covered.
Tesco also offers a guaranteed acceptance over 50s whole of life policy for UK residents age 50 to 80. No medical exam is required and premiums must only be paid until age 90. After the policy is in force for two years, the cash benefit will be paid upon the death of the insured.
Within the first two years, the plan will pay for accidental death or will pay one and half times the premiums paid for any other cause of death. Coverage level and monthly premiums are fixed for the policy duration. Premiums are based on age, gender, and coverage level and begin at just £7 per month.
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