What is Over 50s life insurance?
The urge to protect yourself financially doesn’t end with age.
Life insurance is for everyone. If you’re receiving your pension, retired, or later on in your life story, cover can still be every bit as meaningful.
Sometimes referred to as a Guaranteed Over 50s Plan, so-called for its guaranteed pay-out, this policy type is a way of ensuring that you leave something behind. Unlike its counterpart, traditional term life insurance, Over 50s cover plans are not limited to a defined length of time, nor do they expire. Instead, they offer up a more lasting form of cover with lifelong protection.
Often these cover plans have relaxed entry criteria, which means you could benefit from its guaranteed acceptance without even requiring to give away medical information.
How does Over 50s cover work?
This type of lifelong cover is designed for anyone aged 50 and above.
It works similar to most traditional insurance types, where a payment schedule of routine monthly instalments, known as premiums, secures a final benefit on the maturity of a policy.
The cost of your monthly premiums will be determined by the amount of cover you’d like to nominate at the start of your plan.
What is my “sum assured”?
The benefit held in your policy, which is guaranteed to pay-out in the eventuality of your passing, is referred to as your sum assured. This will be expressed as a total value held indefinitely in your policy (unless you cancel or miss payments.) Your beneficiaries, normally your loved ones, can access the benefit, or pay-out, after the passing of the policyholder. This benefit is issued as a cash lump sum, or standalone payment.
The entry for an Over 50s plan is far more flexible than most insurance types, thus the sum assured is usually at a lower value. The totality of a policy’s pay-out can vary between insurers. Yet, the average value limit ranges between £10,000 – £25,000 against the sum assured.
Is there life cover with no medical?
In short, yes. An Over 50s plan requires no medical questionnaires.
Flexibility is just one of the key attractions with an Over 50s plan. That means you won’t be required to input any medical information to have access to a plan in the UK, making it easier and more convenient than ever to feel protected. A plan can be accepted even if you suffer from an existing health issue, or have been declined elsewhere for insurance. And so, it’s an ideal option for those aged 50 and older looking for cover, even if you have a pre-existing condition.
Poor health doesn’t necessarily negate your acceptance, which is why Over 50s cover types are popular in the UK.
Who can get cover an Over 50s plan?
Acceptance is open to those between the ages 50-85 years old. With this plan, your age can for favourably to help you reach that perfect cover.
Am I eligible for cover?
People who choose this plan:
- Are a UK resident.
- Are aged between 50-85 years old.
- Can meet the monthly premiums.
- Want affordable life cover, but suffer from an existing condition, or have had poor, niggling health issues in the past.
- Have otherwise good health but want a life plan.
One of its main attractions, specific to an Over 50s plan, is that acceptance is its guarantee. This means that if you meet the basic eligibility criteria, you could find a plan fit for you.
How much does an Over 50s plan actually cover?
Because life makes us think about matters close to the heart, securing financial plans to look after loved ones feels a like an urgent priority. An Over 50s cover plan can help look after their financial wellbeing after your passing and long into the future. Similar to life insurance, it works as a contingency plan, or inheritance, and will ensure that something of value is left behind.
What does the pay-out cover?
Once the funds reach your beneficiary, after a valid claim is issued, how it is spent is left to their choosing. An Over 50s plan is enjoyed for this financial gain.
There are a wealth of benefits to owning a policy with a lifelong pay-out, including:
- You want to leave inheritance, or gift, to someone special.
- You want to cover the expense of a funeral, which can become pricey.
- You want to clear away any outstanding balances against debts that might exist.
- You want to limit the hurt of your loss with a financial gain.
- You want to help out the family and secure their financial future.
Can I get joint cover for an Over 50s life plan?
Unfortunately, this particular plan is only available for a single applicant, or one named policyholder.
Given the added risk to a policy, where already no medical information is taken, insurers try to avoid joint cover options.
What about those in their 60s, 70s (and beyond)?
Over 50s is a sensible plan for those in their 60s and 70s, too (where the entry age gets capped at an upper threshold of 85 years old).
When applying for cover, certain details will be assessed, such as:
- Your age.
This is a common, if guiding, metric that insurers use to determine your health-risks and likelihood of other risks.
- Your health.
Whilst this may not disqualify your acceptance, it can hurt your premiums, especially if you smoke.
- Your budget.
The amount you’re covered for typically reflects what you can comfortably afford to spend out on premiums.
Depending on your answers, these details can influence the cost of your premiums. Reflecting on this, you might consider if your budget qualifies an Over 50s plan over a more traditional term-based cover option. Or, if you’re healthier, it might be a more cost-effective option to nominate a term-based cover.
Over 50s life plans for smokers
As with all cover types, smoking can increase the costs of premiums in your policy. This is because smoking is known to trouble health and wellbeing and, therefore, increases your risk.
To determine if your smoking status will effect your policy’s premiums, it’s worth comparing the market as there’s no universal rule for Over 50s plan. Some insurers may choose to collect this information, where others might ignore it altogether.
How much does Over 50s life insurance cost?
One of the most popular talking points is the cost-effectiveness, or affordability, of an Over 50s plan. Often these sorts of inquires have been frustrated by pervasive myths and other misconceptions about insurance.
Top questions to avoid asking yourself might sound something like this:
- How can life cover fit into my everyday budget?
- Is it really affordable?
- What if it costs too much?
How is my premium calculated?
Aside from the common measurables – age, health, smoking, and amount of cover – your premiums can be influenced by risk. Broadly, the higher your risk the costlier the premiums. And so, it’s not uncommon for a premium against an Over 50s plan to be more expensive precisely because there’s an intention of guaranteeing a pay-out.
From the relaxed criteria, where your medical history isn’t investigated, insurers can’t accurately, or precisely, measure up your risk. This will inform the cost of your premium too, yet that won’t exclude your from seeing affordable premiums when you apply.
Your desired sum assured, or benefit, will guide pricing, too.
How much would you like to cover? This is your opportunity to fix-in a value that works with you and your loved ones. Yet, the quality of a plan is as essential as its quantity. So, when contemplating the amount you’d like to leave behind, it’s worth considering how your premiums can work with your everyday budget and broader goals.
How do my premiums work?
If your financial circumstance change, such as entering into retirement, you can sometimes opt to reduce your premiums through an insurer to maintain your plan at a lower monthly cost.
Some plans, though specific to its terms, will only request routine monthly premiums up until a certain age. If so, this detail can work in your favour. Your cover will still remain in place for life, you just have to maintain monthly instalments.
On your policy’s anniversary, premiums may be suspended. This means you don’t pay into your plan, yet cover is still active. An anniversary is defined, most commonly, by its policyholder reaching 30 years into the policy after its starting point. Or, if the policyholder reaches their 90th birthday.
When can I make a claim?
In order for a valid claim to be issued, most insurers respect a period of two-years of successive payments. That means you will need to be actively contributing into your plan during this time, mostly to ensure that your beneficiaries can fully access their benefit.
This is often referred to as a waiting period or a qualifying period.
If you pass away prior to this two-year grace, in the early throes of your policy, then your premiums will normally be refunded, and the insurer might issue a token gift, which is a pay-out marked at a percentage against the premiums paid into the policy so far.
Yet, in certain extenuating circumstances, such as accidental death, your beneficiaries can access the full sum specified in your plan. Most insurers flex accidental death protection as a guarantee in your policy*.
*If accidental death protection applies to your personal policy, it will be reflected in the terms and conditions.
Can I make this financial commitment work?
As a kind of bookend to this chapter on the routine costs of an Over 50s life plan, it’s essential to consider the financial commitments involved with this type of life cover. An Over 50s plan is not the same thing as an investment or savings plan, which means its premiums are only valuable if you maintain an active plan (by keeping up with monthly instalments).
Is an Over 50s plan taxable?
Tax is one of life’s few certainties.
But is there a way to skirt potential losses to the total sum your family will receive?
If so, what do I do?
Writing life insurance in trust
Writing your Over 50s life insurance in trust removes your policy’s benefit from forming part of your overall estate. This could reduce the likelihood of paying inheritance tax against your assets, which is at 40% on anything over £325,000.
What does it mean to write an insurance in trust?
It means that your policy is handed to a named trustee on your death.
What are the benefits?
- Your funds can skip probate.
- Your loved ones have a more easeful, quickened access to the benefit.
- Your proceeds are faithfully distributed according to your wishes.
- Controls your legacy – avoiding the taxman.
What is the best life insurance?
The better, if best, life policies will be the ones that react to your unique goals and budgets, where it becomes a far more personal purchase.
What is life assurance?
Though similar sounding to life insurance, the differences between the two are quite subtle.
An Over 50s life plan, though referred to “insurance”, is actually classified as assurance.
- Life Insurance.
A lump sum pays out if you die within the term of your cover.
- Life Assurance.
A lifelong plan, so you get a pay-out when you die.
How is an Over 50s plan & term-based life insurance different?
On a traditional life cover plan, the eligibility becomes stricter with age.
Gaining acceptance on a term-based insurance plan, then, becomes tougher, if more expensive as you age.
If it’s a matter of affordability, it’s worth assessing the criteria for both plans before reaching a conclusion on the best cover available to you. An Over 50s plan boasts, quite advantageously, a set of relaxed criteria, and so gnawing health conditions won’t always work against you on application. The promise of a guaranteed pay-out will also delight most.
Yet, affordability is only part of the equation.
It’s worth investigating your purpose. Or, simply ask yourself: what is it, exactly, I’d like to protect?
In the earlier years of life, you are likely to have more debts or loans, such as a mortgage. Yet, as time passes us by, these financial commitments lapse, mature, or complete.
Because life insurance allows for a greater sum assured, it’s a popular choice for homeowners with a mortgage, or those with an outstanding loan. The benefit of this kind of policy, being greater than an Over 50s, is usually taken out to offset a loan of scale. A claim is, however, only valid if the policyholder passes way within the term.
An Over 50s benefit, on the other hand, is limited to a £20,000 pay-out, but it covers you for life.
How is an Over 50s plan & whole of life different?
Both are classified as life assurance, so your cover is lifelong with a guaranteed pay-out on the maturity of the policy.
As mentioned, an Over 50s plan is relaxed with certain entry criteria, such as not requiring any of your medical information. Yet, a whole of life policy will need knowledge of your medical history and any existing conditions.
Those with troubled or poor health, past or present, could face pricier premiums under a whole of life policy, because your wellbeing is calculated against cost.
Similar to most forms of life cover, whether whole of life or term-based life insurance, another point of consideration is the value, or amount of cover, you would like assured against your policy.
For most cover options, the sum assured against an Over 50s plan is typically much lower.
It’s possible with both types of assurance that you could pay more into the policy than your desired sum assured. Understanding the amount of cover you are hoping to obtain is crucial in ensuring a policy is bespoke to your finances and future ambitions.
What is the difference between an Over 50s plan and a funeral plan?
It’s a popular motivation to see people use an Over 50s plan to cover funeral expenses. Yet, the key differences between this policy type and, for example, a funeral plan relate to what it is, exactly, that you want to cover.
- What is a funeral plan?
This type of plan is designed, specifically, to pay-off funeral expenses. It is not, however, very flexible with how the money is used. It’s beneficial for those with a clearly defined purpose: those wishing to cover their funeral. Your benefit will pay-out the various costs associated with a funeral, such as minister fees and the funeral director costs. It also secures the current rate against these costs, so that future hikes won’t exhaust your financial resources.
Planning a funeral on an Over 50s benefit
The payment at the maturity of this policy type has much more flexibility. This gives your beneficiaries discretion and authority over its spend. With a sizable sum assured, your benefit could pay-off any funeral expenses, but that will depend on future rates.
Can you have more than one Over 50s plan?
Where affordability motivates a lot of decisions regarding life cover, it’s worth considering how multiple policies can bring value to your layers of protections.
- “Layers” of Protection
A powerful benefit of holding multiple policies, not limited to any one type of cover, is how you can layer up your protection. Layers is a means of adding up a reserve of cover policies, or bettering your contingency plans, to make things more financially secure.
It’s uncommon that multiple policies will be cheaper than a standalone cover. Sometimes quality is better than quantity. Because a cover policy is a personal item, protecting the things that matter to you, it helps to carefully consider the benefits of each type.
- Sum Assured
As an Over 50s plan has a cover limit, a kind of top value, it can pay to hold other policies to extend the amount you’re covered for. You can layer on policies to add into a larger pay-out.
Is terminal illness included?
Over 50s cover plans do not currently include this additional cover.
Where can I buy a policy?
These days everyone’s shopping online – so why not empower your search for a better life policy that way, too? Because a policy’s costs will change with every new, or different insurer, it helps to compare.
Making a claim
The policy matures on the passing of the policyholder.
A loss is a moment of grief for those you leave behind. Yet, an Over 50s plan can help remove the financial upset of losing a loved one. It can be expedient, too. Meaning, in most cases, that claims aren’t held up and your beneficiaries can access your benefit without hassle.
Compare Over 50s life cover quotes (for top rates)
It can pay to compare the market – literally. Cost against your premiums will vary between insurers, and so seeing the whole of market, comparing for quotes, is a sensible plan, especially for anyone with a budget.
Introducing Life Market, a nifty engine that can see the bigger picture when it comes to your search. We can expertly navigate the market to locate top notch deals that work for your budget and goals.