What is over 50s life cover?
19 May 2020
Life insurance can seem like a very young person's game. It’s often talked about as something to cover you until your kids leave home or until your mortgage is paid off, and it’s undeniably usually cheaper to buy when you’re in your twenties than in your forties.
However, if you’re over 50 and have either never had life insurance or had a policy that ran its course when you were younger, you don’t have to leave yourself and your family unprotected. Whilst the average life insurance policy might be a little on the pricey side after you hit the big five - o, there are still options for you that won’t break the bank.
Over 50s Life Cover could be perfect for you. If you still have dependents or large loans to pay off, it’s a great way to protect your loved ones. But equally, if you’re over 50 then your needs could be very different to that of a 30-something with young kids and years left on a mortgage.
So who is Over 50s Life Cover for?
We’re glad you asked. Anyone over 50. Seriously. One of the reasons that this type of cover is so great is that you’re guaranteed to be accepted if you’re between the ages of 50 and 80 (sometimes up to 85, maybe older, depending on the policy and the insurer). You won’t have to pass a medical exam or answer extensive health questions in order to be accepted. The only thing you have to be is the right age.
Anyone over 50 can benefit from this type of cover, even without loans to pay off or large regular monthly payments (like a mortgage). The money from the pay out can go towards funeral costs, or be put into savings accounts for children and grandchildren, or even just be a little something for your family for when you’re not around.
How does it work?
- Fixed Premiums You pay your monthly premiums and these rates don’t go up and down over the years unless you want to make changes to your policy. This means you just need to pick a policy that fits with your situation and suits your budget. Going through a broker can help here, as they can help you explore all your options.
- Fixed Pay out Most insurance providers pay out a fixed amount, decided when you buy the policy, no matter when you pass away. There’s usually a period of a few months to a year at the start of the policy where you’ll only receive an amount equivalent to what you’ve already paid in, but after that, you’ll receive the whole amount. Whilst the amount of your pay out will depend on your policy, the average payout is usually over £4,000, according to Sunlife.
- Free cover If you’re lucky enough to live up to a grand old age, you could be paying these premiums a long time - more than 30 years. Most insurers offer free cover if you celebrate enough birthdays - usually when you get to 90 years old. You’ll then be able to enjoy free cover with your policy still in place.
Another reason this kind of cover is so great is that it’s pretty simple. Here’s why:
Are there any downsides?
We’d love to tell you that this kind of cover is all pros and no cons, but for some people that’s not true. The good news is that if you buy carefully and choose a policy that suits your budget, you should be fine.
- Don’t let it lapse It’s really vital to keep up with payments, or your policy will lapse and you won’t have any cover. If this happens, you won’t get back any of the money you paid in, so you’ll have lost possibly a pretty big chunk of money and have nothing to show for it. But if you’ve planned out your budget and found a policy that suits you, you’ll have no problems. Speaking to a broker can help you find a policy to suit your budget.
- You could pay more than you’ll get back Even if you pay your premiums religiously each month, it’s still possible to lose money. For instance, if you bought a policy when you were 50 years old that gave you £10,000 as a pay out, and you paid a monthly premium of £25 for this, then by the time you were 83 years old, you’d have paid more in premiums than you’d get as a pay out. Buying the right policy for you at a good rate should prevent this happening - but if you’re lucky enough to live for a long time, it’s a possibility.
- Know your budget With life expectancies soaring over 80 now, it’s likely that you could be paying the premiums for this for a long time. It’s important to consider your budget, as realistically you could be paying for more than 30 years. There are super affordable plans though, with some providers offering premiums costing less than £5 per month.
If you’re wondering whether Over 50s life cover is right for you, drop us a line here at LifeSearch. We’re a team of experienced and knowledgeable brokers who want to help match up the right person with the right policy. We can talk you through it and help you find the right policy, so you can protect the people you love for your whole life.
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