Scottish Widows Life Insurance Review 2025

Scottish Widows has a history spanning two centuries, beginning in 1812:

• 1812: a general fund was created in Scotland to “secure the provisions of widows, sisters and other females”
• 1815: the fund became Scotland’s first life mutual under the name ‘The Scottish Widow’s Fund and Life Assurance Society’
• 2000: Scottish Widows demutualised, becoming part of Lloyds Banking Group
• 2009: joined Lloyds Banking Group

Today, Scottish Widows has nearly 6 million customers with a suite of product offerings such as Pension & Protection products, and Scottish Widows Life Insurance.

Scottish Widows Life Insurance Features

• Pays out a lump sum on death
• Can choose between single or joint policyholders
• Wide variety of policy types available: Level Term, Decreasing Term, Whole of Life, and Family Income Benefit
• Guaranteed premiums – i.e., fixed over time for security and peace of mind (premiums may increase if you choose increasing cover, change your policy, or renew your Life Cover).
• 49 critical illnesses covered: 41 standard plus 8 “additional” critical illnesses
• Children are covered until age. Maximum cover amount of £25,000 or 50% of the main sum assured (whichever is lower).
• ‘Increasing Life Insurance’ option for policyholders to increase their insurance benefit up to 10%. Premiums increase at a rate of 1.4 times the percentage increase of your benefit.
• Premium Protection Option: if you are unable to work for 26 weeks or more, Scottish Widows will waive a policyholder’s payments until they can return to work. This option can be added when the policy is taken out.

Additional Benefits

Complementing the features mentioned above, Scottish Widows Life Insurance also comes with many additional benefits:

• All policyholders and their families have access to a free nurse advice service provided by RedArc, known as Scottish Widows Care. This provides support for serious illness, bereavement, trauma, disability and recovery on discharge from hospital.
• Policyholders also have access to the “Best Doctors” service which is included at no extra cost. This gives all policyholders the benefit of top medical specialists for a second medical opinion in person. Policyholders have the option of seeing a UK-based specialist, and also a recommended course of therapy if subsequently diagnosed with a serious illness.
• For up to 90 days whilst an application is being assessed, policyholders will be covered in the event of accidental death before the application has been accepted or rejected. The benefit amount for this Accidental Death Cover will be either up to £250k or the applied for sum assured if less.
• Free mortgage cover automatically for up to 90 days while in the process of buying a new home. Between the day of finalising the property contract and the beginning of the mortgage term, policyholders can receive up to £1,000,000 in Life Insurance cover and £500,000 for Critical Illness cover. Exclusions apply to this benefit, and eligibility may vary.
• Children are automatically included under Critical Illness Cover, plus a one-off benefit of £5,000 in the event of the death of a child.

Coverage Summary

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Minimum Coverage Limits

• £25,000

Maximum Coverage Limits

• Indexed Cover: £15m
• Level/Decreasing Life Cover: £25m
• Critical Illness Cover: £3m
  • This pays out a cash sum should a policyholder be diagnosed with a covered critical illness during the term of the policy
  • This cover can be combined with life cover so that policyholder will be covered both in the event of death or in the diagnosis of a terminal illness during the policy period

Maximum Entry Ages

• Standard Life: 79
• Life Insurance with Critical Illness: 64
• Waiver of Premium: 60

Guaranteed Insurability

In the event of:

• Marital status changes
• Increased mortgage debt
• Additional child dependents
• Increased salary

Policy Exclusions

• Self inflicted injury or suicide within 12 months of the policy start date

N.B. Policyholders must reside in England, Wales, Scotland or Northern Ireland (not including the Isle of Man or the Channel Islands)

Defaqto Ratings for Scottish Widows – Updated March 2025

Defaqto ratings are an independent assessment of financial products, designed to help consumers understand the quality of different offerings. They use a star rating system from 1 to 5, with 5 stars indicating the highest quality. These ratings are based on a detailed analysis of policy features and benefits.

Scottish Widows has achieved strong Defaqto ratings across its key life insurance products. As of March 7, 2025, they hold 5-star ratings in several categories, including:
* Critical illness (level term)
* Life assurance (level term)
* Life assurance (decreasing)
* Critical illness (standalone)
* Critical illness (decreasing)
Their Protection Menu Plan is also rated highly at 4 out of 5 stars.

When comparing Scottish Widows to major competitors like Aviva, Legal & General, and Zurich, we see a consistently strong performance. While these competitors also hold numerous 5-star ratings across various plans, Scottish Widows maintains a high standard across its core protection offerings. For instance, competitor Protection Menu Plans are also rated at 4 stars by Defaqto.

For consumers, these high Defaqto ratings are a positive indicator. They suggest that Scottish Widows life insurance products are comprehensive and offer a high level of features and benefits compared to others in the market. These ratings can provide confidence in the quality and reliability of Scottish Widows’ life insurance options.

Why Scottish Widows Life Insurance?

• A well-established British insurer with an exceptionally long history in Scotland and the UK, with a strong track record of excellent performance
• With a history as a fund and a mutual, there is a strong corporate commitment to the social dimension of life insurance and a commitment to customer service
• Strong and secure capital backing by Lloyds Banking Group, one of the largest financial institutions in the UK
• Fully backed by the Financial Conduct Authority (FCA)
• Scottish Widows has some of the highest Life Insurance Payout rates, consistently paying out on 99.4% of Life Insurance claims
• Scottish Widows makes their policies highly flexible by providing a range of policy options that can be changed at nearly any time, even after policy inception.
• Terminal Illness Cover and Total Permanent Disability Cover are automatically included
• Life Cover and Critical Illness Cover offered as a Family Income Benefit.
• If Decreasing Life Cover has been chosen, Scottish Widows gives policyholders a choice over their interest rate, which can be anything between 0% to 18%. Most insurers have a predetermined decrease rate for their Decreasing Term policies; Scottish Widows allows policyholders to tailor this to the terms of their mortgage, allowing them to decide exactly when the insurance cover will reach zero.
• Policyholders also have the option to choose Increasing Cover:
  • With an increasing policy, both benefits and premiums increase over time to account for inflation and the rising cost of living
  • In general, policy premiums can increase by 2% to 10% per annum, linked to the Retail Price Index (RPI)
  • This is suitable for policyholders wishing to guarantee that the amount of policy cover will be sufficient for their family’s financial protection even in the event of inflation. This is often chosen by those who would like to protect against the potential effects of future inflation on the amount their beneficiaries will receive.

As with all life insurance reviews, the features and terms noted above may not apply to all Scottish Widows products. It is imperative that all policy conditions should be noted carefully and complied with by policyholders to ensure that coverage fully remains in place.

Defaqto ratings