What is the best UK life insurance policy for over 50s?
If you’re over 50, you may be thinking about the future and how your loved ones will cope financially if anything happens to you.
Over-50s life insurance is one way to guarantee financial security for your family.
In this article, we’ll help you find the best over 50s life insurance for you. We’ll also look at the basics of over 50s life insurance, how it compares to normal life insurance, and what you should consider before you take out a policy.
Best life insurance for over 50s
The best life insurance for people over 50 will depend on your circumstances and the market at the time of application, so you’ll need to compare options and shop around.
One of the easiest ways to do this is to use our free comparison tool. It searches the market for the best over 50 life insurance policies, comparing leading brands and cover types to find you the cover that provides the protection you need.
Life Insurance For Over 50s
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What is over-50s life insurance in the UK?
Over-50s life insurance is a type of cover that lasts your whole lifetime and guarantees a payout to the beneficiaries (usually your family) when you die.
You pay monthly premiums, and when you pass away, your beneficiaries receive a lump sum – as long as you’ve been keeping up with your payments for long enough. Usually, the payout amount is fixed and doesn’t depend on how long you live.
Most over-50s life insurance policies are designed for customers aged 50 to around 80–85 years (with the exact cutoff age depending on the provider).
Over-50s life insurance vs normal life insurance
To better understand whether over-50s life insurance is right for you, it’s important to know how it differs from normal life insurance.
One difference is that over-50s life insurance provides whole-of-life cover – meaning that it applies for your whole lifetime.
By contrast, normal life insurance usually comprises something called term life insurance. Term life insurance covers you for a set period (such as 10 or 20 years) and pays out only if you pass away within that term. If you live longer, you get nothing.
Another unique characteristic of over-50s life insurance is the lack of health check requirements. Other life insurance policies often require medical exams or detailed questionnaires; with over-50s insurance, your health and lifestyle aren’t usually factored into calculating your premiums.
How much does over-50s life insurance cost?
Some life insurance policies for over-50s cost as little as a few pounds a month, although more expensive policies are also available.
The exact amount you pay will depend on various factors, including:
- Your age: Older people generally pay more expensive premiums for this type of insurance, especially after the age of 50.
- Your smoker status: This is one of the few lifestyle factors that over-50s life insurance considers. You’ll pay higher premiums if you smoke.
- The type of cover you get: Your premiums will be higher if your policy provides a larger payout or additional features, such as critical illness cover (which offers payouts if you’re diagnosed with an illness or medical condition during the policy term).
- The provider: Some insurers offer better value policies than others, so it’s worth shopping around.
How much cover will I get from over 50s life insurance?
The payout amount you get from over-50s life insurance will vary, depending on the details of your policy and the age at which you took it out (as policies for older people generally include less generous payouts compared with policies for younger people).
In general, cover ranges from about £1,000 to £25,000.
When you’re calculating how much cover you should get, you’ll need to take into account considerations like:
- Your family situation (e.g. whether you have a spouse and whether they have an income)
- Whether you have financial dependents (including pets and partially dependent children who are young adults)
- Your outstanding mortgage balance
- Your outstanding debts
- Medical bills and long-term care costs
- Funeral costs
- Other foreseeable expenses (e.g. weddings, university expenses, deposits for your children’s first homes)
What are the alternatives to over-50s life insurance?
We’ve already mentioned ordinary life insurance as one alternative to over-50s life insurance.
You can also consider other potential sources of financial support for your family after you die:
- Savings accounts or tax-free cash ISAs: If you’re in good health, saving your money directly can be better value than getting over-50s life insurance. However, one potential problem with this strategy is that you might not have saved enough to cover your funeral costs by the time you die.
- Funeral plan: Funeral costs can range from about £3,000 to £5,000 or more, depending on the details of the ceremony and its location. A funeral plan allows you to pay in advance (either in a lump sum or in instalments).
- Use assets you leave behind in your will: You can state in your will that you want your assets used in a certain way (e.g. to pay for your funeral). However, if this entails selling property, the sale may take some time, so make sure that whoever is arranging your funeral or covering other expenses has alternative funds to use in the meantime.
- Check death in service employment benefits: Some employers offer payouts if you die while you’re working for them. Trade unions, professional bodies, and similar associations also sometimes offer survivor benefits for members’ families.
- Bereavement support payments: This is a type of benefit your partner might qualify for if you have children. You can find out more about bereavement support and eligibility criteria on the UK government website.
Is over-50s life insurance worth it?
Over-50s life insurance policies have several advantages that can make them a good option for some people.
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- Guaranteed lump sum payout: As long as you meet all of the required conditions specified by your over-50s life insurance policy, your beneficiaries get a guaranteed payout.
- Easy to get coverage: Over-50s life insurance has minimal criteria for acceptance, so it’s available to almost anyone within the specified age range.
- No income or capital gains tax: As a rule, there’s no capital gains or income tax for over-50s life insurance payouts (although inheritance tax can apply in some cases).
- Fixed monthly premiums: Once you take out an over-50s life insurance policy, the premiums usually remain unchanged throughout the plan, so they won’t increase in price as you age.
- You can’t touch the insurance money: Unlike with savings accounts or investments, you can’t spend your life insurance payout. This might be a disadvantage in some cases, but it’s good for people who are worried about being tempted to dip into their savings.
- Health and lifestyle don’t matter: You’ll usually have to declare your smoker status when you get over-50s life insurance, but you won’t need to get medical checks or answer extensive questions about your health and lifestyle. This makes it a good option for people with preexisting health conditions.
- Premium payments are sometimes capped: Some providers cap premium payments at a certain age or after a set number of years, whilst your cover continues until you die without you needing to continue premium payments. However, even if your policy includes this feature, there’s still no guarantee you’ll get a good deal overall.
Over-50s life insurance also has some important downsides to bear in mind:
- Poor value: Over-50s life insurance policies can be quite expensive (partly because they don’t require medical underwriting). If you live to be 80+ years old, you might end up paying in more than you get out.
- Potentially small payouts: Over-50s life insurance often gives less cover compared with normal life insurance. Payouts may even fall short of the amount required for funeral costs, with customers sometimes being misled about this.
- Cover cancellation if you stop paying: If you miss payments or stop paying your premiums, your coverage may be cancelled.
- Waiting periods: You’ll usually have to wait 12–24 months before you become eligible to claim. If you die in the meantime, your beneficiaries won’t get a full payout; instead, they might only get a partial payout or a refund of the premiums you’ve paid.
- Inflation erosion: The fixed payout for over-50s life insurance doesn’t account for inflation, so the real value of the payout decreases over time.
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- Exclusions for some causes of death: Some causes of death might not be covered, such as alcohol or drug abuse.
- You can’t cash in your policy: Although this can also be a plus point (as it eliminates any temptation to spend your savings), it limits your financial flexibility and access to emergency funds.
- No joint policies: With normal life insurance, you can sometimes get policies designed for couples. However, joint policies aren’t usually available for over-50s life insurance.
Life Insurance For Over 50s
Compare Life Insurance Deals with UK Insurers
The Smart Way To Get Life Insurance Cover
Complete our quote form and get a great quote!
Compare the best life insurance quotes using our FREE no obligation service to find out which insurer can offer the best cover for your personal circumstances.
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