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Over 50s life insurance explained

Here at, we understand how daunting it can be choosing how to save for your future, or the future of your loved ones. Our fully qualified, in house financial adviser, Andrew Gurton, has been talking to us about everything we wanted to know about over 50’s life insurance, from how it works to how it differs from saving plans.

What is over 50’s life insurance?

Over 50s life insurance is whole of life insurance plan which has been designed to pay a lump sum to your loved ones when you die. They are available to anyone aged between 50 and 85, regardless of any health issues a person may have. By paying a regular monthly payment, your next of kin will receive a specified amount when you pass away, provided you have continued to make your monthly payments to the plan for at least one or two years.

Is an over 50s life insurance plan right for me?

Whether an Over 50s life insurance Plan is appropriate for you will depend on your own individual circumstances. If you are over 50 and have health issues, an Over 50s life insurance Plan is something to consider. You won’t answer any health questions and there is a guaranteed acceptance up to the age of 80 or 85, and you will be covered for your whole life.

Are there any different types of life insurance?
Yes, there are:
• Level term insurance
• Renewable term assurance
• Convertible term assurance
• Decreasing term life insurance
• Family income benefit

There’s something called level term life insurance. This is a policy which pays a lump sum to your dependents if you die within a specified period. For example, a term policy of 20 years will only pay-out if you die inside the 20 year period. The premiums of level term life insurance are usually lower than whole of life insurance, but once you pass the set timeframe, you receive nothing.

Renewable term assurance can be renewed at the end of the original term of your policy, without further medical evidence. It provides affixed amount of life cover for a fixed number of years. If the person covered by the policy survives to the end of the term, the policy will end unless reviewed and has no value.

Convertible term assurance policies are similar to term assurance policies, as they have a known level of cover that will pay-out in the event of death within a set time. However, they also have the option to convert. The conversion option allows you to adapt the plan if your circumstances change. It can be converted to either an endowment assurance policy (provides a cash benefit when the policy matures), or a whole of life assurance (provides life insurance for an unlimited period).

With decreasing term life insurance policies the sum assured decreases over the term of the policy. These policies are often used to cover a debt that reduces over time, such as a repayment mortgage. The premiums may be cheaper than for level-term cover as the amount insured reduces over the term of the policy.

Family Income Benefit policies are a type of decreasing term policy. Instead of a lump sum, it pays out a regular income to the beneficiaries until the end of the policy term if you die.

For example, if you are paid £2,000 a month, you can arrange for the same amount to be paid out to your family if you die. However, if you die two years into a 20-year family income benefit policy, your family could get £2,000 a month for 18 years, but if you die a year before the policy ends, your family gets £2,000 a month just for one year.

Rather than paying a monthly premium for an Over 50s Plan, would saving a little each month be better?

I think the best way to answer this question is to use an example of a 60 year-old non-smoking male paying £15 per month for an Over 50s life insurance Plan, who could potentially have a lump sum pay-out of £3462.
If he paid the premiums for 19 years and 3 months, he would have paid more in premiums than the guaranteed sum assured, but if he paid £15 per month in to a savings account paying 4% per annum, he would have accrued £3691 in savings after 15 years. Given the average life expectancy of a 60 year old man is 85, it is likely he will still be paying in to his Over 50s life insurance Plan for several years after the point at which he would have built-up more money in savings.
Unfortunately, we cannot predict when we are going to die, so an Over 50s Plan may provide you with the peace of mind that you desire. If you were to die in the early years of the policy then the lump sum may well be higher than the amount you have built up in savings. It’s a question of choice and doing what you think is right for you as an individual. It may be the case that an Over 50s Plan helps look after those outstanding expenses, leaving your savings for the family to enjoy.
In addition, if you are in poor health and would struggle to get an alternative type of life insurance, then a policy with no medical questions would enable you to have a level of life cover in place to give you and your family peace of mind.

Is an over 50’s life insurance plan or a savings plan best for me?

This will depend on your own individual circumstances. If you feel you need life insurance, then the type and level of cover you choose should depend on what you need it for. Maybe you want outstanding debts to be paid-off, there could be outgoings your dependents could struggle with, and there maybe future spending costs such as university fees for the children. You may want to ensure that the additional expenses your death might trigger are covered, such as funeral costs.
With an over 50’s life insurance plan you won’t have to answer any health questions, there is a guaranteed acceptance up to the age of 80 or 85, and you will be covered for your whole life. Also, if you are looking to cover funeral costs then an Over 50s Plan may be appropriate for you. By paying a fixed premium each month, you will have a guaranteed lump sum that could help with all the issues mentioned above, and any other financial issues that may affect your family.

So, if you have been considering an Over 50’s life plan, we hope this guide has helped. If you have any more questions, or would like to talk to someone about getting an over 50’s life plan, please call us on 0800 092 1245.

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