<font face="Verdana, Arial, Helvetica, sans-serif" size="2"> They will have spotted that for some reason many people are multi-propping rather than single propping and this is not good. The costs of administration for each case is well in excess of the returns from the policy in the first seven years, so they will want to know why these people want separate plans rather than one - after all why would anyone want to pay multiple policy fees (which are generally hidden away in the premium rate).</font>
Like EDI-Traveller, and Steady-EDI, I used to work in the life assurance sector (in Edinburgh, and probably for one of the firms which employs the afore mentioned FT'ers!).
Multi-propping is an issue for a number of reasons - economics primarily - but also because people with cunning financial advisers can use it to try and get under underwriting limits (e.g. if your policy is over £250,000 and you're a 40yr old bloke, you would automatically get referred for a medical, whilst a policy for £249,999 would not (or two policies, each for £125,000 might just slip past unnoticed!)!).
One reason which
used to be valid (at least with the firm I worked for) for multi-propping was for "reasons of assignment". Basically a lot of life assurance policies are either assigned or written in trust (for the benefit of spouse; children etc). You can either write a single trust arrangement to split one policy up, or have lots of individual policies, each with a single beneficiary.
So theoretically, you could tell Tesco/NU that each of your 20 policies is for the benefit of an individual niece or nephew, and that you would prefer separate policies for ease of administration by your estate....
(BTW, I no longer work in life insurance (investment banking seemed much more fun!), so the above could be out of date...)