If you have dependents or financial commitments like a mortgage, life insurance is an important consideration as it will pay out a lump sum when you die. This independent review takes a closer look at Scottish Widows’ life insurance policy, including the types of cover available, typical costs and additional benefits.
Who is Scottish Widows
Scottish Widows was established in 1815 to take care of women and children who had lost their fathers, brothers and husbands in the Napoleonic Wars. The Scottish Widows’ Fund and Life Assurance Society opened for business on 2 January that year, and in 1821 it bought its first property for its sole use in Edinburgh.
In 1995, Scottish Widows Bank launched, offering customers a range of savings, loans and mortgage products. Five years later it was demutualised and became part of the Lloyds TSB Marketing Group. In January 2009, Scottish Widows became part of the Lloyds Banking Group, and it now has almost six million customers.
Scottish Widows was awarded five stars in the ‘Life and Pensions’ and ‘Investments’ categories in the 2020 Financial Adviser Service Awards. Also, Scottish Widow level and decreasing life and critical illness insurance products received a 5 star defaqto rating in 2021.
Scottish Widows Overview
Below is an overview of Scottish Widows’ life insurance policy, including cover types, the company’s claims record and additional benefits.
- Policy types: Choose from level term, decreasing term and increasing term cover, as well as single and joint policies. Terminal Illness Cover is automatically included and you can combine life insurance with Critical Illness cover.
- Claims record: 2020 - Life insurance 99.5%, critical illness 94.2%. 2019 - Life insurance 99%, critical illness 93%. 2018 - Life insurance 99.3%, critical illness 94.1%.
- Additional benefits: Free accidental death cover and free mortgage cover are included from when your application is received for up to 90 days. Policyholders have access to Scottish Widows Care which provides counselling services and other support from qualified nurses.
- Up to £100 cashback: If you apply for a policy through LifeSearch* (simply click on the link and fill out the short form), you will receive up to £100 cashback. You can find out more below.
Scottish Widows Policy Summary
Key facts and features for Scottish Widows’ life insurance policy can be found in the table below:
|Type of cover||Life Insurance|
|Options||Level, decreasing and increasing term cover.|
|Policy Coverage||Single or joint life first event (pays out on first death).|
|Terminal Illness Cover included?||Terminal Illness Cover is included which pays out if the policyholder is diagnosed with an illness that is likely to cause death within 12 months.|
|Can cover increase over time (indexation)?||If you choose increasing cover, the sum assured will increase each year in line with the Retail Price Index. The increase will be at least 2%, up to a maximum of 10%.|
|Waiver of Premium||You can choose to add waiver of premium (Premium Protection) for an additional cost. This means you won’t have to pay your premiums after 26 weeks if you cannot work.|
|Minimum age at entry||18|
|Maximum age at entry||79|
|Policy Exclusions||Suicide in the first 12 months is not covered. Terminal Illness Cover will not pay out if the illness is not expected to cause death within 12 months.|
Key facts and features for Scottish Widows’ critical illness policy can be found in the table below:
|Type of cover||Critical Illness|
|Can it be combined with life cover||Yes|
|Number of critical illnesses covered||30 full payment conditions,10 partial payment conditions and 5 child-specific conditions are covered|
|Children's critical illness cover included||Yes - automatically included. Your child will be covered for 50% of the adult cover amount up to £30,000|
|Minimum age at entry||18|
|Maximum age at entry||64|
|Policy exclusions||No payout will be given if you are diagnosed with an illness that is not covered by the policy. Children’s critical illness will not pay out if the illness symptoms started before the policy began.|
Additional free benefits provided by Scottish Widows
- Terminal Illness Cover is automatically included with life cover and will pay out if you are diagnosed with an illness that is likely to cause death within 12 months.
- Accidental death benefit provides cover from when your application is received for up to 90 days or until your application is accepted, declined or postponed.
- Free mortgage cover for new mortgages starts from the date your application is received and lasts for up to 90 days.
- Access to Scottish Widows Care which is provided in partnership with RedArc and offers long-term practical advice and emotional support.
- Replacement cover is included if you have a joint policy. This means that after a claim is made, the person who hasn’t claimed can take out a new policy on the terms and conditions of the previous policy.
- Children’s critical illness cover is automatically included if you take out your own policy. This will cover your children from birth to the age of 22 and will pay out 50% of the amount of your cover, up to a maximum of £30,000.
- Children’s life cover is also included if you take out critical illness cover. This will pay out £10,000 in the event of the death of a child.
- Policies are portable so where two people have policies within the same plan, they can split the plan and move policies into a new plan if they choose to.
Optional benefits provided by Scottish Widows
- Option to add Premium Protection (sometimes called Waiver of Premium) which means you won’t have to pay your premiums if you are unable to work due to an accident or illness. Scottish Widows will start to pay your premiums after 26 weeks.
- Option to add Life Cover Buyback to a life and critical illness policy. This allows you to buy back your life cover if a critical illness claim has been paid.
How much does Scottish Widows insurance cost?
The tables below show monthly premiums for £250,000 of level term life insurance with Scottish Widows over a 20-year term.
We have looked at figures for both a non-smoker and a smoker in various age groups and compared the costs to the cheapest and most expensive premiums in the market.
Scottish Widows life insurance comparison - £250,000 of cover over 20 years (Non-Smoker)
|Scottish Widows premium||Cheapest premium||Most expensive premium|
Scottish Widows life insurance comparison - £250,000 of cover over 20 years (Smoker)
|Scottish Widows premium||Cheapest premium||Most expensive premium|
It’s important to use the above figures as a guideline only. The amount you, as an individual, will pay for your life insurance premiums will depend on a number of factors, including:
- Your age
- Your health
- Whether you smoke
- Your occupation (some roles are deemed as higher risk so premiums will be higher)
- The amount of cover you choose
- The term of your policy
To ensure you choose the right policy at the best price, it is worth speaking to an independent insurance specialist first. Below we explain how you can also qualify for up to £100 cashback if you decide to take out a life insurance policy.
Best way to buy Scottish Widows life insurance?
If you’re planning to buy a life insurance policy with Scottish Widows, it’s a good idea to speak to an independent insurance specialist first, as they will be able to advise you on the best life insurance or critical illness policy for your circumstances and help you assess how much cover you need.
Independent specialists will be able to access quotes from all major insurance companies, and they can also match you with the insurance provider who will view your application more favourably. In addition, they will be on hand to help you complete your application forms, put your policy into trust and help you make a claim in the future.
Simply complete this short form* to receive a callback at a time that suits you. There is no obligation to take things further but if you do, you will qualify for up to £100 cashback.
Scottish Widows life insurance summary
- Established in 1815.
- In 2020, Scottish Widows paid out 99.5% of life insurance claims and 94.2% of critical illness claims.
- Life insurance automatically includes Terminal Illness Cover and can also be combined with Critical Illness cover.
- Children’s critical illness cover and life cover are automatically included if you take out your own critical illness policy.
- Free accidental death cover and free mortgage cover are included from when your application is received for up to 90 days.
- Policyholders have access to Scottish Widows Care which provides counselling and other support services.
- Scottish Widows life insurance may not necessarily be the cheapest option for you as the amount you pay will depend on a number of factors. It’s therefore best to shop around and compare deals carefully.
- If you buy a life insurance policy through LifeSearch*, you will receive up to £100 cashback. Simply click on the link and fill in the short form to be called back at a time that suits you.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses and do not wish to qualify for the cashback referred to in the article - LifeSearch
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