LV= vs Scottish Widows Which Life Insurance Should You Pick

Choosing the right life insurance provider is one of the most significant financial decisions you can make for your family's future. The UK market is home to many long-standing, reputable insurers, but two names that consistently appear at the top of the list are LV= and Scottish Widows. Both are giants of the industry with rich histories and comprehensive product ranges. But which one is the right fit for you?

This decision isn't just about finding the cheapest premium; it's about understanding the nuances of policy features, the quality of additional support services, and the insurer's track record for paying claims. As expert protection brokers, we at WeCovr spend our days navigating these details, helping our clients find the cover that truly meets their needs.

This in-depth guide will give you our broker's insight into LV= and Scottish Widows, comparing them across life insurance, critical illness cover, and income protection. We'll delve into their products, their added benefits, and who they might be best suited for, empowering you to make a confident and informed choice.

WeCovr’s broker insight into two of the UK’s most established life insurers

LV= and Scottish Widows are pillars of the UK insurance landscape. They have protected British families for centuries, evolving from small, community-focused societies into financial powerhouses. Yet, despite their shared prestige, they have distinct identities, product philosophies, and strengths.

• LV= (Liverpool Victoria) is renowned for its mutual status and member-first approach, often leading the way with innovative product features and strong customer service.
• Scottish Widows, part of the Lloyds Banking Group, leverages its immense scale and financial backing to provide robust, reliable cover, often at highly competitive prices.

Understanding these differences is key. One might offer a more comprehensive critical illness definition that suits your health concerns, while the other might provide a more flexible income protection plan for your self-employed status. This article will break down these crucial details for you.

A Tale of Two Insurers: Who Are LV= and Scottish Widows?

Before we compare policies, it's helpful to understand the companies behind them. Their history and structure influence everything from their company culture to their product design.

LV= (Liverpool Victoria): The Friendly Society

Founded in 1843, LV= (short for Liverpool Victoria) began with the purpose of helping Liverpool's working families afford a decent burial. This ethos of community support remains at its core. As a mutual, LV= is owned by its members (policyholders) rather than shareholders. This means profits are often reinvested into the business to improve products, services, or offer member benefits.

• Heritage: Over 180 years of service.
• Structure: A mutual, meaning it's run for the benefit of its 1.3 million members.
• Market Position: Known for its "friendly society" feel, combined with award-winning products, particularly in income protection and critical illness cover. They often champion clarity and simplicity in their policy wording.
• Financial Strength: LV= consistently receives strong financial strength ratings, providing peace of mind that they can meet their long-term claim commitments.

Scottish Widows: A Legacy of Trust

Scottish Widows has an even longer history, established in 1815 to support the widows, sisters, and other female relatives of Scottish soldiers who died in the Napoleonic Wars. The iconic "Widow" has been a symbol of the company's promise of security and stability for generations.

In 2000, Scottish Widows demutualised and became part of the Lloyds TSB Group, now Lloyds Banking Group. This gives it the backing of one of the UK's largest financial institutions.

• Heritage: Over 200 years of trust and reliability.
• Structure: Part of the Lloyds Banking Group, a FTSE 100 company.
• Market Position: A dominant force in the UK pensions and protection market. Their scale allows them to be highly competitive on price for standard life insurance products.
• Financial Strength: As part of Lloyds, its financial stability is exceptionally high, assuring policyholders of its long-term security.

Core Protection Products: A Head-to-Head Comparison

Let's get to the heart of the matter: the policies themselves. We'll examine the three main pillars of personal protection: Life Insurance, Critical Illness Cover, and Income Protection.

Life Insurance (Term & Whole of Life)

Life insurance pays out a lump sum if you pass away during the policy term. It's designed to clear a mortgage, cover funeral costs, and provide your family with a financial cushion.

LV= Life Insurance LV= offers straightforward and flexible term life insurance. Their focus is on providing robust, clear cover that you can rely on.

• Key Features:
  • Terminal Illness Cover: Included as standard. If you're diagnosed with a terminal illness and have less than 12 months to live, they will pay out the claim early.
  • Guaranteed Premiums: Your monthly payments are fixed for the entire policy term, so you'll have no nasty surprises.
  • Increasing Cover Option: You can choose to have your cover amount increase each year in line with inflation (RPI), ensuring its real-world value doesn't decrease over time.
  • Separation Benefit: If you have a joint policy and later separate, you both have the option to take out new single policies without further medical questions.

Scottish Widows Life Insurance Scottish Widows' 'Protect' platform provides a very similar, high-quality life insurance offering. Their strength often lies in their competitive pricing for healthy individuals.

• Key Features:
  • Terminal Illness Cover: Also included as standard on policies with a term of two years or more, providing that crucial early payout if needed.
  • Guaranteed and Reviewable Premiums: While most opt for guaranteed premiums, they do offer reviewable options which can be cheaper initially but may increase later.
  • Replacement Cover: On a joint life, first death policy, the surviving partner can take out a new single policy within a set timeframe without more medical underwriting.
  • Accidental Death Benefit: Provides cover while your application is being processed, so you are protected from day one (subject to terms).

Table: Life Insurance Feature Comparison

Critical Illness Cover (CIC)

Critical Illness Cover pays a tax-free lump sum if you are diagnosed with one of a specific list of serious medical conditions, such as cancer, heart attack, or stroke. This money can be a lifeline, allowing you to cover medical bills, adapt your home, or replace lost income while you recover.

According to the Association of British Insurers (ABI), cancer is the most common reason for a critical illness claim, accounting for over 60% of cases, followed by heart attack and stroke. This highlights the vital importance of this cover.

LV= Critical Illness Cover LV= is widely regarded in the broker community as having one of the most comprehensive CIC policies on the market.

• Key Features:
  • Extensive Condition List: They cover a very high number of full-payment conditions and additional, partial-payment conditions.
  • Enhanced Payouts: For certain conditions of a higher severity (e.g., loss of speech, severe burns), they can pay out more than your original sum assured (up to £200,000 extra).
  • Child Cover: Their children's cover is particularly strong, often including enhanced payments for certain childhood cancers and even a death benefit for a child.
  • Clarity of Definitions: LV= has worked hard to make their condition definitions clear and fair, reducing ambiguity at the point of claim.

Scottish Widows Critical Illness Cover Scottish Widows offers a solid and dependable CIC policy, backed by their significant financial clout.

• Key Features:
  • Comprehensive Coverage: Their policy also covers a wide range of conditions, including all the main ones like cancer, heart attack, and stroke.
  • Children's Critical Illness Cover: Included as standard, providing a payment if your child is diagnosed with a specified condition.
  • Strong Core Proposition: While perhaps not having as many 'bells and whistles' as LV='s enhanced payouts, their core offering is robust and trusted.
  • Integration with Support Services: A claim can trigger access to their RedArc nurse service, providing practical and emotional support during recovery.

Table: Critical Illness Cover Feature Comparison

Broker Insight: The "best" CIC policy is highly personal. While LV= often wins on the sheer breadth and depth of its cover, Scottish Widows provides a very strong, reliable product that may be more affordable. It's crucial to examine the definitions of conditions that are most relevant to your family's medical history.

Protecting Your Paycheque: Income Protection Insurance

While life insurance looks after your family if you're gone, what happens if you're unable to work for a long period due to illness or injury? This is where Income Protection (IP) comes in. It pays a regular, tax-free monthly income until you can return to work, retire, or the policy term ends.

Recent ONS data shows that over 2.8 million people in the UK are out of work due to long-term sickness, a record high. This statistic underscores the vulnerability of our income and the critical role of IP insurance, especially for the self-employed and those in the gig economy with no sick pay to fall back on.

LV= Income Protection

LV= is a market leader in Income Protection. Their products are flexible, comprehensive, and packed with features designed to support you both financially and practically.

• Policy Types:
  • Full Income Protection: Pays out until the end of the policy term (e.g., your retirement age).
  • Personal Sick Pay: A budget-friendly option designed for manual workers and tradespeople, offering shorter payment periods (1, 2 or 5 years per claim).
• Definition of Incapacity: Crucially, LV= uses an 'Own Occupation' definition for most jobs. This means you can claim if you are unable to do your specific job, not just any job. This is the gold standard.
• Unique Selling Points:
  • Parent and Child Cover: If you need to take time off work to care for a sick child (for over 3 months), LV= can provide a monthly benefit.
  • Fracture Cover: A lump sum payment for specified fractures, even if you don't need to take time off work.
  • Death Benefit: A lump sum (typically £10,000) is paid if you die during the term, which can help with funeral costs.

Scottish Widows Income Protection

Scottish Widows also provides a high-quality Income Protection plan as part of their 'Protect' range. It's a solid, dependable option from a trusted brand.

• Key Features:
  • Definition of Incapacity: They also offer an 'Own Occupation' definition, which is essential for robust protection.
  • Deferred Periods: You can choose how long you wait before the payments start (e.g., 4, 8, 13, 26, or 52 weeks), allowing you to align the policy with any sick pay from your employer.
  • Linked Claims: If you return to work but the same illness or injury causes you to be off again within 12 months, your claim restarts immediately without another deferred period.
  • No Standard Exclusions: Unlike some insurers, they don't have standard exclusions for things like back pain or stress, meaning every case is assessed on its own merits.

Executive Income Protection for Company Directors

For company directors, there is a more tax-efficient way to arrange this cover. Executive Income Protection is owned and paid for by the limited company.

• Benefits for Directors:
  • Premiums are typically an allowable business expense, making it highly tax-efficient.
  • Benefits are paid to the company, which can then distribute them to the director, usually via PAYE.
  • It protects the business as well as the individual, ensuring the director's income can be covered without draining company resources.

Both LV= and Scottish Widows offer excellent Executive Income Protection plans, and a broker like WeCovr can help you determine if this is the right and most efficient route for you and your business.

Table: Income Protection Feature Comparison

Beyond the Policy: Added-Value Benefits and Support

Modern insurance is about more than just a cheque. The best insurers provide a suite of support services designed to help you stay healthy and to support you and your family during difficult times. These benefits are often free to use from the moment your policy starts.

LV= Doctor Services and Member Benefits

LV='s package of support is extensive and reflects their member-focused ethos.

• LV= Doctor Services: Access to a remote GP 24/7, prescription services, and second medical opinions from specialists.
• Member Support Fund: Financial assistance for members facing difficult circumstances, even for issues not covered by the policy.
• Health and Wellbeing Support: Access to services like physiotherapy, psychological support, and lifestyle coaching.
• Member Care Line: A dedicated phone line for legal and counselling advice.

Scottish Widows Care and Clinic in a Pocket

Scottish Widows, through their partnership with RedArc and Square Health, provides a formidable support package.

• Scottish Widows Care (provided by RedArc): Access to a dedicated personal nurse adviser who can provide long-term practical advice and emotional support after a diagnosis or bereavement.
• Clinic in a Pocket (provided by Square Health): A 24/7 remote GP service, repeat prescription service, and access to physiotherapy and mental health specialists.
• Grief and Bereavement Counselling: Specialist support for the family in the event of a claim.

Table: Added-Value Benefits Comparison

At WeCovr, we believe in this proactive and supportive approach to health. It's why, in addition to the excellent benefits provided by insurers, we offer our clients complimentary access to our AI-powered calorie and nutrition tracking app, CalorieHero. We want to empower our clients to live healthier lives, which is the best protection of all.

The Numbers Game: Premiums, Payouts, and Performance

Ultimately, you need an insurer who offers a fair price and, most importantly, pays claims.

How Are Premiums Calculated?

There is no single "cheaper" insurer. The price you pay is unique to you and is based on:

• Age and Health: Younger, healthier applicants pay less.
• Lifestyle: Smokers or those with risky hobbies will pay more.
• Occupation: A desk job is cheaper to insure than a manual trade.
• Cover Amount and Term: The more cover you want and the longer you want it for, the higher the premium.

This is why using a broker is so valuable. We can instantly compare prices from both LV=, Scottish Widows, and the wider market based on your specific profile.

A Look at Claims Statistics

Both insurers have outstanding records for paying claims, demonstrating their reliability.

LV= 2023 Claims Statistics:

• Total Paid: Over £118 million in individual protection claims.
• Payout Rate: 96% of all claims paid.
• Main Reasons for Claim: Cancer (44%), heart-related conditions (19%), and stroke (7%).

Scottish Widows 2023 Claims Statistics:

• Total Paid: Over £230 million in life and critical illness claims.
• Payout Rate: 98.4% of all claims paid.
• Main Reasons for Claim: The vast majority of non-payments are due to 'non-disclosure' – where the customer didn't provide accurate information on their application. This highlights the importance of being 100% truthful when applying.

These figures show that if you are honest and your claim is valid, you can have extremely high confidence that both companies will pay out.

Specialist Cover for Your Circumstances

Your protection needs change depending on your personal and professional life. Both LV= and Scottish Widows offer specialist policies to meet these needs.

For Business Owners and Company Directors

• Key Person Insurance: Protects your business against the financial loss of a key employee due to death or critical illness. Both insurers offer robust Key Person plans.
• Relevant Life Cover: A tax-efficient life insurance policy for employees and directors, paid for by the company. It's a fantastic perk that provides death-in-service benefits for small businesses.
• Shareholder Protection: Provides a lump sum to allow the remaining shareholders to buy the deceased's shares, ensuring a smooth transition and business continuity.

For the Self-Employed and Freelancers

For this group, Income Protection is not a luxury; it is an essential part of your financial toolkit. The flexibility of LV='s "Personal Sick Pay" can be ideal for tradespeople on a budget, while the comprehensive full-term cover from both providers offers complete peace of mind.

For Families and Estate Planning

• Family Income Benefit: Instead of a single lump sum, this policy pays out a regular, tax-free monthly or annual income to your family, making it easier to budget and manage. Both LV= and Scottish Widows offer this.
• Gift Inter Vivos: This is a specialist life insurance policy designed to cover a potential Inheritance Tax (IHT) bill on a large gift you have made. If you die within seven years of making the gift, the policy pays out to cover the tax liability.
• Placing Your Policy in Trust: Both insurers make it easy to place your policy in a Trust. This simple legal step ensures the payout goes directly to your beneficiaries, avoiding probate and potentially IHT. It is a free service that a good broker will always help you with.

So, LV= or Scottish Widows: How Do You Choose?

After reviewing all the evidence, there is no single winner. The "best" insurer is the one that best matches your unique circumstances, health profile, and priorities.

Here is a summary to help you decide:

You might choose LV= if...

• You want the most comprehensive Critical Illness Cover, with features like enhanced payouts.
• You need flexible Income Protection, and features like Parent and Child Cover or Fracture Cover are appealing.
• You are self-employed in a manual trade and their 'Personal Sick Pay' product fits your needs and budget.
• You value the ethos of a mutual company run for its members.

You might choose Scottish Widows if...

• You are looking for highly competitive pricing on standard Life Insurance, especially if you are in good health.
• You value the security and backing of a major banking group like Lloyds.
• The long-term support offered by the RedArc nurse service is a key priority for you.
• You prefer a straightforward, robust policy from one of the UK's most recognised financial brands.

The Broker Advantage

Trying to weigh all these factors alone can be overwhelming. This is where an independent broker like WeCovr adds immense value. We don't work for any single insurer; we work for you.

Our role is to:

1. Understand You: We take the time to learn about your family, your finances, your health, and your concerns.
2. Compare the Market: We use our expertise and technology to compare policies from LV=, Scottish Widows, and all the other leading UK insurers.
3. Provide Expert Advice: We explain the pros and cons of each option in plain English, highlighting the crucial differences in policy wording that you might miss.
4. Find the Right Price and Product: We find the provider that offers the most suitable cover for your needs at the most competitive price.
5. Handle the Hassle: We manage the application process and help you place your policy in Trust, ensuring everything is set up correctly from the start.

Conclusion: Securing Your Future with Confidence

Both LV= and Scottish Widows are outstanding insurance providers with a long-standing history of protecting British families. They offer five-star products, pay the vast majority of claims, and provide excellent support services that go beyond a simple financial payout.

You cannot go wrong by choosing either of them. However, the subtle differences in their product features, definitions, and pricing mean that one will likely be a better fit for you than the other. Your health, occupation, and what you value most in a policy will be the deciding factors.

The most important step is to take action. Protecting your family or your business is a fundamental responsibility. By understanding your options and seeking expert advice, you can put a plan in place that provides complete peace of mind, knowing that whatever happens, the people who matter most are financially secure.

Frequently Asked Questions (FAQ)