Aegon UK is to buy the UK life, pensions and unit trust business of Guardian Royal Exchange from its rival Sun Life and Provincial Holdings.
The deal will cost Aegon UK £759m.
The proceeds of the sale will be used to repay SLPH corporate borrowings.
Both groups currently compete with each other in the IFA market through their subsidiaries Scottish Equitable for Aegon and Axa Sun Life in the case of SLPH.
GRE products are distributed almost exclusively through IFA's. It has assets of approximately £9.5bn and over 1,000 staff, based in Lytham, Edinburgh and Watford.
SLPH group chief executive Mark Wood says: "We have carefully reviewed GRE's life, pensions and unit trust businesses following our acquisition of GRE.
"The review considered all options from complete integration to a full sale and in light of an attractive offer received from Aegon UK, we have decided that disposal of the main businesses offered a number of advantages."
SLPH will retain control of PPP lifetime care.