Tesco has today announced it will start to sell private medical insurance.

The supermarket giant already offers general insurance, life protection, savings and other financial services to customers, but in offering two "simple" health insurance products it is hoping to tap into an industry worth an estimated £3.2bn a year.

From today, customers at 1,000 Tesco stores will be able to pick up health insurance leaflets alongside their weekly grocery shop. The documents will outline two levels of cover - premium and core - designed in conjunction with AXA PPP healthcare.

Core cover will provide private medical insurance for inpatient and day-patient care, cover for outpatient scans and for radiotherapy and chemotherapy cancer treatments.

The more expensive premium insurance will include £1,000 for additional outpatient benefits every year.

Tesco Personal Finance claims the new products are offered at prices up to 32% lower than comparable providers. Customers can also build up a no-claims discount of up to 55% over four years, it added.

The group said the cost for a 45-year-old male in Leeds would be around £46.97 per month for the premium cover, compared with between £60.78 from Bupa and £68.71 from Norwich Union for similar products. For Tesco's core product, premiums would cost £28.62 a month, while similar poducts from Bupa and Norwich Union would cost more than £10 extra.

The products can be bought with no medical questions for people under the age of 76, making it easier to purchase, the supermarket claimed.

Jeremy Sutton, head of savings and investments at Tesco Personal Finance, said: "Our customer research suggests that perceived high prices, complicated products and complex medical questions have been major stumbling blocks to buying health insurance.

"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."

But one established player in the health insurance market questioned whether the products really do represent value for money for the consumer.

Steve Flanagan, commercial director of Bupa Health Insurance, said: "People may pay less for Tesco health insurance, but it could cost them dearly in the end.

"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."

He added: "By not requesting a person's medical history when they first buy cover, people may not fully understand what they are covered for until they claim, which for some will be too late."