Tesco launches cheap health insurance
Wednesday, 10 Jan 2007 14:26
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You can now buy cheap health insurance with your value burgers at Tesco, after the supermarket launched a new private medical cover product.
And Tesco claims its health insurance is as much as 32 per cent cheaper than its competitors.
"Our customer research suggests that perceived high prices, complicated products and complex medical questions have been major stumbling blocks to buying health insurance," said Jeremy Sutton, head of savings and investments at Tesco Personal Finance.
"We aim to change that by offering products that are simple, good value and easy to buy. Our approach will open up the market to people who want the choice that health insurance offers."
Tesco health insurance asks no medical questions for people under 76 and allows customers to build up a no-claims bonus of as much as 55 per cent over four years.
Cover can be bought over the phone or online without having to fill in complicated medical questionnaires, with leaflets available from 1,000 Tesco stores.
There are just two levels of cover on Tesco health insurance - premium and core.
Premium provides in-patient and day-patient cover, cover for out-patient scans and for cancer radiotherapy and chemotherapy, as well as £1,000 for additional out-patient benefits per annum, available for under £50 a month.
Core cover offers the same except the £1,000 of additional out-patient benefits, available for under £30 a month.
Health insurance experts and rivals are less convinced by the new Tesco health insurance product.
Emma Walker, of comparison site Moneysupermarket.com, commented: "Predictably for such a well-oiled marketing machine, Tesco’s private medical insurance product offers several perks to entice its target market to sign up."
But she added: "It is by no means the Rolls Royce of the private medical insurance market in terms of the level of cover on offer, nor is it always the cheapest."
She recommended consumers read all the small print and compare as many policies as possible for both value and cover provided.
Additionally, income protection, critical illness, life insurance, and private medical insurance should be seen as a "basket of goods".
As such Britons should "choose which are most relevant" for them from this group of policies.
Steve Flanagan, commercial director for Bupa health insurance, was also critical of the new product - pointing out cheap cover might not always prove good value.
"People may pay less for Tesco health insurance but it could cost them dearly in the end," he said.
"Much has been made of the no claims discounts on offer but these could discourage some people from seeking early treatment which can't be good.
"People should have access to high-quality treatment as and when the need arises and not feel penalised or discouraged from seeking medical help."
Mr Flanagan also questioned whether not requesting a person's medical history was a good thing for the customer as well. "People may not fully understand what they are covered for until they claim, which for some will be too late," he explained.
Both Mr Flanagan and Ms Walker recommended people speak to a financial adviser before signing up for cover - but were also positive about Tesco's entry to the market.
"Any efforts to raise awareness of the benefits of private medical insurance can only be a good thing, as it is traditionally considered only to be available via employee benefits or as the preserve of the wealthy," Ms Walker said.
Mr Flanagan added: "Anything which makes health insurance available to more people is good news for customers."
Learn more about Tesco health insurance: www.tescofinance.com