Over 50s Life Insurance
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Guide to Over 50s Life Insurance
Are you over 50 and considering buying a life insurance policy? Before buying this type of insurance, know what you’re getting and what to avoid. We’ll show you how over 50s insurance policies work, what to watch out for and how to choose the best policy.
Helpful Links: Insurance Associations
ABI – Association of British Insurers – The Association of British Insurers is the leading trade association for insurers and providers of long term savings. … need to contact their insurer for a Green Card which they will need to carry on them if they wish to drive their vehicle in the EU.
BIBA – British Insurance Brokers’ Association – The British Insurance Brokers’ Association (BIBA) is the UK ‘s leading general insurance organisation.
What is Over 50s Insurance?
Over 50s insurance is a type of life insurance for anyone between the ages of 50-80. Anyone in this age group can apply for over 50s insurance. In fact, there’s guaranteed acceptance, no matter what your health. You don’t have to answer any questions about your health or have a medical exam. You can’t be turned down for this insurance due to any health conditions, your age, etc.
People sometimes buy this type of insurance as a way to help loved ones with funeral costs, to pay off existing debts or as a gift to those left behind.
How Does Over 50s Insurance Work?
These plans require you to pay a specific monthly premium for the rest of your life. The premium doesn’t change—which can be a good thing (or bad, if your financial situation changes for the worst). When you pass away, a fixed lump sum is paid to your beneficiaries.
These policies can be great for people who have pre-existing health issues, or for those who have suddenly become ill. Acceptance into the program is guaranteed—with no medical exam required.
Premiums are fixed and will not decrease as you get older. As a result, you’ll need to have a good idea of what your future income will be. When shopping for this type of policy, you’ll be able to choose a premium that fits your budget. Some policies allow you to stop paying when you’re 90 or older; however, you’ll need to keep making premium payments until the cutoff age set by the policy.
Another thing to keep in mind is that these policies usually will not pay out during the first 12 to 24 months, or they may pay out a lower lump sum. This will vary by policy. So, if you pass away during this period, the amount your loved ones receive will be much lower than if the policy is in effect longer than 12-24 months.
Payouts are usually in one lump sum that’s determined from the beginning. In other words, there is a guaranteed amount that will paid out, as long as you’re covered. Some policies may set the payout at £10,000, while others may pay out £25,000. The payout will vary by policy.
One more important note: with over 50s insurance, you can’t miss a payment. You must keep making the monthly payments, otherwise your coverage will lapse (end). If you miss a payment, you won’t have coverage and your beneficiaries will not receive any funds when you pass away.
Things to Consider about Over 50s Insurance Policies
While over 50s policies may look like a good bet, you need to pay attention to each policy’s specifics and carefully read the terms before making any decision. Why?
1). Pay more in than beneficiaries will receive: it’s possible you could pay for the insurance for 40 years. Let’s say you buy an insurance policy at age 50. If your premium is £30 per month, and the payout for your policy is £10,000, then if you passed away at 90, you’d be paying in £14,400, but only receive £10,000. Then you’re not getting as much value as you put in.
2). Don’t forget inflation: while your premium will stay the same no matter what, the fixed payout amount could be devalued due to inflation. Think of it this way—will a £10,000 payout be able to buy as much in 20-30 years? Will it retain the value it has now? Inflation is the normal way of things, so you’ll have to keep this in mind when choosing a policy.
3). Exclusions: yes, there are some exclusions, but these are not often advertised. You must read the policy to find these. Here are some of the usual exclusions where you will not receive a payout if you die:
- Within 12-24 months of buying the policy (though some policies may offer to payout a lower sum)
- Death caused by drug or alcohol abuse
- Death by suicide
4). I have a policy, but don’t want it—can I cancel: if you already have a plan, but now don’t want it, yes, you can cancel the policy. However, keep in mind that you’ve been paying the premium for a certain amount of time. If you stop now, your beneficiaries will receive nothing back when you pass. All the money you’ve paid in will be lost. If you’ve had the plan for over 2 years or longer, then it probably makes more sense to keep paying the premium, unless you simply can’t afford it.
5). Write the policy “in trust”: funds received from life insurance policies aren’t usually subject to income or capital gains taxes; however, the funds could be hit by the inheritance tax. To avoid your beneficiaries losing a percentage of the payout, see if the coverage allows you to write your policy “in trust.”
Is Over 50s Insurance Right for Me?
Over 50s insurance can be a good buy for some people. Not to be indelicate, but it can be a great option if you believe you’ll pass away sooner than later.
For instance, if you’re diagnosed with a terminal illness and have a short time to live, or if you smoke or are seriously obese, your life expectancy is shortened. In these instances, an over 50s policy can be a good investment, because you won’t have to pay in longer than 12-24 months, and your beneficiaries will receive the fixed lump sum set by the policy.
Finding the Right Policy for You
When you start shopping for policies, be sure to use the insurance comparison tools available online. These are fast and easy to use; they’ll help you find the best policy at a premium you can afford.
Before signing up for any policy, it’s a good idea to read through the entire policy terms and conditions. You must understand what you’re buying and how much it will cost. It may also be necessary to do some math to figure out which policy is best for you. But it’s well worth the effort in order to find the right policy at the right premium for your budget.
Who Needs Over 50s Life Insurance?
Most people think that Life insurance is meant for the upper class, that’s a myth, there are different policies, why not sit and compare cheap life insurance policies with your family and decide which one is really a “cheap life insurance’ policy to you.
Life insurance is for everyone, it is for everybody who wants a better life for their family. As a single mother or father with kids, what plans do you have for your children if death strikes? How will your kids fare? As a single mother or father, as a couple, you need to compare cheap life insurance policies and then choose the one that is actually a cheap life Insurance Policy for you and your family.
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