In this article I’m going to be looking at over 50’s Life Insurance.
Is it worth taking it out?
What are the benefits?
And how high the premiums are likely to be?
We’ve all seen the adverts haven’t we?
White-haired people pottering about in their conservatories banging on about Parky and his free gifts to their mate who’s just popped round.
(If I could add an eye-roll emoji here I would).
But on a serious note, are Life Insurance plans specifically aimed at those over 50 worth it?
Is it better to just take out ‘normal’ Life Insurance – or are Carol Vorderman and Michael Parkinson really onto something?
Obviously thinking about dying and how your family might cope financially with funeral costs on top of the emotional upset isn’t pleasant, but it’s a fact that the cost of a funeral isn’t cheap.
No one likes the idea that their family might have to borrow money or get into debt in order to cover those costs when we’re gone, so some sort of Life Insurance is definitely a good idea.
The monthly premiums for Life Insurance can work out expensive if you don’t have a very healthy lifestyle or have underlying medical problems, and those on a budget might think they can’t really afford another monthly bill.
Also, those who are young or don’t have children probably think they don’t need it.
All things considered it’s easy to see why it can be tempting to wait and take out an over 50s plan.
Any children you have will probably have left home and have their own lives, so they don’t need your financial support anymore.
It would just be nice to leave something to pay for funeral costs, wouldn’t it?
Plus, that free pen does look decent…
What Are The Advantages To Over 50s Life Insurance?
1. You Won’t Be Asked Medical Questions
Although there will be criteria you have to meet such as being a UK resident and, of course, being over 50, you’re guaranteed to be accepted regardless of any medical issues – in fact you won’t even be asked about your health.
2. Your Cover Will Last Your Lifetime
An over 50’s Life Insurance policy will mean making monthly payments until a specified date, or until you die, depending on the policy.
If you were to die only a few years into your policy, your family’s pay out would be more than you paid in.
Bonus! (not the dying bit, obviously).
3. You Can Apply For Cover When You Are Older
Unlike other types of insurance policies there isn’t an age limit when it comes to taking out over 50’s Life Insurance.
Other types of Life Insurance policies become unavailable to buy once you are over 80, whereas you can always buy an over 50’s Life Insurance policy.
4.Cheap Monthly Premiums
Cover, as the adverts will tell you, can start from as little as a few pounds a month, so is affordable for most people.
What Are The Disadvantages To Over 50s Life Insurance?
1. Your Cover Is Limited
If you take out ‘Term’ or ‘Whole Of Life’ Insurance, the amount you can insure yourself for is unlimited.
However, with an over 50s Life Insurance policy your pay out is capped, typically at around £15,000.
Furthermore, the older you are at the time of taking out an over 50s insurance policy, the lower that cap is.
2. You Could Pay In More Than You Get Out
The longer you live the more likely it is that you could end up paying in more than the lump sum received at the end.
3. It Might Not Be The Best Value For Money
For healthy people in their 50’s the premiums might work out more expensive than normal Life Insurance because of the guaranteed acceptance terms.
What’s The Alternative To Over 50s Life Insurance?
If you are a healthy person in their 50s then a traditional Whole Of Life Insurance policy might offer better value in the long run.
The pay out for your family could be as much as 40% more than it would be with an over 50’s plan.
Or, a Term Life Insurance policy could be an option if you are over 50 and still have dependent offspring, and therefore want to leave a larger sum behind.
Over 50’s insurance in my opinion should only be taken by people who would otherwise be declined ‘normal’ life insurance because of the medical questions they will get asked.
With over 50’s Life Insurance offering guaranteed acceptance due to there being no medical questions, you must appreciate you’re not going to get the same value for money as with other types of Life Insurance.
So it’s safe to say that you do have several options if you haven’t already taken out any type of cover by the time you reach your 50’s.
Over 50’s Life Insurance is largely going to come down to how much you want to leave, how much you can afford to spend on monthly premiums, your health…
…and how much you want a free pen..
