So your birthday cake might have a few more candles on it now - so what? We are all young at heart, after all. But if you’ve recently hit the big 50, you may have noticed a sudden abundance of over 50s life insurance leaflets, brochures and tv adverts wherever you turn. Is this just a marketing ploy? Or... something you should be considering?
Life insurance, whether specifically for over 50s or not, is all about protecting the ones you love in the sad event that you should pass away. It is a financial safety net that can support them through a very difficult time and ensure that they are not left with any extra financial burdens as a result of your passing. This can be a huge weight off your mind.
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We take out insurance to protect our physical assets all the time - our phones, laptops, houses and cars - without giving it too much thought. Life insurance, however is, in our humble opinion, something extra special, because it is about protecting the most important thing of all: the people we love.
So, in short. Yes, all of the leaflets and adverts, jingles and billboards are clever marketing, and admittedly maybe a slightly annoying reminder of our age, but there’s never been a better time to finally think about getting your life insurance sorted.
This guide will explain what over 50s life insurance is and help you decide whether it might be the right fit for you and your family.
What is over 50s life insurance?
Over 50s life insurance is (you got it!) life insurance designed for people who are over the age of 50. But while it is very similar to some other types of life insurance, there are some key differences, which we will outline in this guide.
It's a type of whole of life insurance policy, meaning that it doesn’t expire - no matter what age you die, your loved ones will be guaranteed to receive a payout.
The one caveat with over 50s plans is that there’s usually what we call a ‘waiting period’ - a length of time after taking out your policy during which you won’t receive a payout if you die, instead the insurer will usually refund your insurance premiums to you. Waiting periods are typically one year or more.
This is different to term life insurance, where there’s no waiting period, but your policy will only cover you for a certain length of time, or ‘term’. This means you could outlive your term life plan, but therefore never receive a payout.
How does over 50s life insurance work?
Briefly, this is how it works. You pay a monthly or annual fee called a ‘premium’ and then, when you pass away, your policy will pay out a lump sum of tax free money to your loved ones. You can take out an over 50s policy if you’re aged between 50 and 80 and are a UK resident.
Like any type of life insurance, the payout from an over 50s policy can be used wherever it is most needed; there are no rules about what it can or can’t be spent on.
That being said, over 50s life insurance payouts are often used to leave a financial gift to a loved one or to cover the cost of a person’s funeral.
It’s not a nice thing to think about, but the fact is that funerals cost a lot of money. Perhaps more than you think, actually, and unfortunately, the price is on the up. In 2020, the average price of a burial funeral in the uk was £4,383(1).
But, when you add in the legal and send off fees, the actual cost of passing away, which sits with those you leave behind, can be over double that - wowza!
Many people choose to take out an over 50s life insurance policy in order to cover these costs, meaning that their loved ones will be able to give them a proper send off without suffering financially as a result.
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Do I need life insurance after 50?
If you're healthy and financially secure, there may be no reason for you to buy life insurance. You can probably get by if you have enough savings or income from investments to cover expenses in case of an emergency.
If you would prefer not to use these resources to cover you in the event of death or serious illness, then life insurance, or critical illness cover may still be beneficial to you. In addition to providing cash benefits, it also helps cover funeral costs, mortgage payments and other expenses.
However, if you don't have these resources, then life insurance or other forms of protection may be even more valuable to you.
Another reason for choosing over 50s life insurance is that, particularly for someone in poorer health, it is an extremely affordable option, with policies starting from as low as £7 a month.
If you’re interested in purchasing an over 50s plan and would like to chat through your options, please give us a call on:
01392 436 193
(Monday to Thursday 9am – 5.30pm, Friday 9am – 5pm)
Term life insurance or over 50s insurance - which is better?
At this point, you’re probably wondering why on earth you shouldn’t invest in an over 50s life insurance plan? But there are some downsides, and, as ever, whether it is the best option for you depends on your individual circumstances. Here we will consider some of the reasons why you might choose to purchase a term life insurance policy instead of an over 50s plan.
The state of your health should play a big role in determining whether you go for an over 50s policy or a term life insurance plan. While it can be a bonus to take out a policy that isn’t strict on the medical terms and conditions, you may pay over the odds for cover if you are in excellent health.
As we mentioned before, term life insurance means that you are not guaranteed a payout, as you can outlive your policy. This might seem off-putting, compared to a guaranteed payout from an over 50s policy. However, when you take out a term life insurance plan, you choose the length of the term, and some policies cover you up to age 90, so given UK life expectancy is around 80, the likelihood of you receiving a payout is pretty high.
Another thing to consider in your decision is the amount of cover you are likely to need. By that we mean, how big of a payout you need to ensure that no financial burden is passed onto the people you leave behind. Cover levels on over 50s life insurance plans tend to be smaller than those on term life insurance. So, if you only need your life insurance plan to cover your funeral costs, then an over 50s plan could be more than sufficient. However, if you have other outstanding debts, such as a mortgage, that you don’t want to pass on to your loved ones, then the limited cover on offer from an over 50s policy simply may not be enough to meet your insurance needs and you may be better off choosing a term life insurance policy.
How can I buy over 50s life insurance?
Though over 50s life insurance and term life insurance do differ in many ways, they both have one key, crucial similarity, which is that they are designed to support your loved ones during a time of need.
At Cavendish Online, we offer many options to help you find the best insurance for you and your family. You can speak to an adviser to get a quote for Over 50s cover, or to see what other options are suitable for your needs.
Our Over 50s life plans aim to give your loved ones peace of mind. They can feel secure, knowing they’re protected financially if something happens to you.
If you could do with a helping hand, you can choose to speak with one of our specialists over the phone, who can guide you through the process and help you choose the best policy for your personal needs. Call one of our experts for some support today on: 01392 436 193
01392 436 193
(Monday to Thursday 9am – 5.30pm, Friday 9am – 5pm)
Why buy over 50s life cover?
Here are just a few benefits of buying an over 50s life plan:
Guaranteed acceptance - Applications for over 50s cover are generally accepted by most insurers. As a result, there are fewer chances of rejection when applying for a policy.
No medical - There are no medical questions or health checks during application. This means that you don't have to worry about disclosing any medical issues.
Fixed premiums - Premiums remain constant throughout the duration of your policy. This means your monthly premiums won't rise as you grow older and vulnerable to health conditions.
Guaranteed payout - When you pass away, your beneficiaries receive a guaranteed amount of money. This is providing the cause of death is covered by your insurance provider.
Provides an income for your loved ones - Once you die, your beneficiaries receive a lump sum that could help cover any debts and living costs. Your beneficiary receives the money regardless of any financial problems they may face.
Please note: The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit. If you have not claimed before the end of your policy, the policy will end, and no benefit will be paid.
If you experience financial difficulty and can no longer pay your premiums, please contact your insurer before cancelling your policy and before it lapses automatically as they may have options available to stop you losing the plan.
How do I choose the right amount of life insurance?
Choosing the correct level of coverage depends on several factors, including your current situation, future plans, and what you expect from your estate.
It's important to understand that life insurance isn't something that should be purchased without careful consideration.
The best way to determine the right level of cover is to speak to a professional advisor. They can help you work through your options, and advise on an adequate sum assured and/or term for your circumstances.
If you’re unsure about how much cover you need, you can read our guide on - How much life insurance cover do I need?
At what age should you stop buying life insurance?
Like most things, unfortunately there is no right answer for everyone. As long as there is something to protect, you may be in need of life insurance. For example, if you still have a mortgage or financial dependents.
You may also want to keep your life insurance in place if you would like to leave your loved ones cash after you die or if you expect your estate will be subject to inheritance tax.
Speak to the experts...
Give our advisers a call today.
Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.
The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way.
01392 436193
(Monday to Thursday 9am – 5.30pm, Friday 9am – 5pm)
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