As much as we'd all love to, we can't stay 18 forever (maybe in spirit perhaps!), life speeds up and so do our responsibilities. Whether you have a partner or children (or both), you might reach the stage of buying life insurance. This guide aims to inform about the ins and outs of Guaranteed Life Insurance.

With most types of life insurance, you'll find that as you get older, the higher your insurance premiums can become. The good news is that if you're aged 50 or over a Guaranteed life insurance policy can ensure you have something to leave your loved ones once you're gone...

What is Guaranteed Life Insurance?

Guaranteed life insurance is a 'whole of life' policy essentially for people aged 50 and over. Like any life insurance policy, it pays out a lump sum payment in the event of your death.

As this is aimed towards over 50s, there are no health questions and insurers won't take any new or pre-existing conditions into account when assessing the cost of your policy plan. This makes it beneficial for those who may have previously been turned down from other types of life insurance. The only factors insurance companies will need confirming before accepting you is your age, your smoker status and whether you’re a UK resident. Once you've agreed on the monthly premium amount, payment will be taken via direct debit.

What Guaranteed Life Insurance covers

When taking out a guaranteed life insurance policy you can expect cover for certain such as:

  • Immediate cover once you apply.
     

  • Guaranteed payment for your beneficiaries on your death, as long as you’ve had the policy for at least the qualifying period (usually 24 months).
     

  • Accidental death - although accidental death cover is available immediately on Over 50s life insurance, these policies will only pay out on other types of death once the insurers waiting period is over (please see your selected insurers policy summary document for full details).
     

  • Non-accidental death - Cash lump sum paid on your death once you’ve passed the qualifying period. Should you die before the qualifying period due to a non-accident, your premiums paid so far are typically paid out to your beneficiaries.

Ultimately, the range of coverage depends on the provider's plan. Many providers have different terms so it's always best to compare your options. You might find that some providers cap the maximum age of coverage if you are a smoker. In some cases, answering additional health questions can result in qualifying if you qualify for a discounted premium/increased sum assured.

Pros And Cons Of Guaranteed Life Insurance

Like any type of insurance policy, there will always be positives and negatives attached.

PROS

  • Coverage for ages 50 and over (some providers may have a lower age limit).
     

  • You're guaranteed acceptance regardless of your occupation or any health conditions you may have.
     

  • You don't need to disclose your family medical history when applying for cover.

CONS

  • Monthly Premiums are more expensive for Guaranteed life insurance when compared to standard life insurance. This is down to the fact insurers are facing a higher risk as they aren’t aware of your medical history.
     

  • Another downside is that the final lump sum can be limited. Your beneficiaries may only receive a set amount, lower than a medically underwritten life insurance pay-out.  This can vary depending on the insurance provide

Why you need Guaranteed Life Insurance

Your death could have a serious impact on your family's finances, so it never hurts to give them peace of mind.  Some reasons why you may need guaranteed life insurance are:

  • If you have any dependents such as children or a partner who relies on you financially.
     

  • Support towards mortgage repayments if it is yet to be paid off.
     

  • To assist your family with funeral expenses should you pass away.

Taking out a life insurance policy will give you peace of mind, knowing that if the worst were to happen, your family will not need to worry about their financial security. One thing to remember is that it's always important to compare policies before you make a final decision.

Another option worth looking into for funeral plans and providing your family with financial support towards the cost of a funeral is over 50's life insurance. Here at Cavendish Online, our unique service guarantees that at least one quote returned will have a £300 cashback gift (y).

Interested? Why not fill out a form here.

Is Guaranteed Life Insurance tax-free?
 

Luckily, along with the other types of life insurance, a guaranteed life insurance pay-out is tax-free. Despite this, it is factored into inheritance tax liabilities. This means that if the value of your estate is over the inheritance tax threshold, your beneficiary may be taxed when they receive your pay-out. [1]

For more information regarding tax for life insurance pay-outs, check out our article here.

[1] https://www.gov.uk/inheritance-tax

Seeking advice? Give us a call


You can choose to speak with one of our amazing specialists over the phone. They'll help guide you through the process and advise you in choosing the best policy for your personal needs. At Cavendish Online we are dedicated to helping you find the best and most affordable option that suits you. We won’t just limit your search to one company either, as our team of advisers work on a whole of market basis.

Rather than paying a one off fee, if you choose to take a policy through our advised service Cavendish Online will recieve some commission for the work that they do (though we sacrifice a large proportion of this to bring costs down for you!). 

01392 436 193 (Monday to Friday, 9am - 5.30pm)

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