How to make the best Over 50s life insurance comparison


May 2, 2017
How to make the best Over 50s life insurance comparison

When it comes to making the best Over 50s life insurance comparison, there are a number of factors you need to take into account. Price and the size of the cash sum paid out are key but there are other considerations which you may not have thought of. To help below is a table showing guaranteed life insurance quotes from a number of market leading providers, along with important information for you to mull over before making your decision.

Company Cash Sum £10 a month Cash Sum £20 a month Cash Sum £30 a month
Royal London £2,239 £4,752 £7,265
Aviva £1,968 £4,428 £6,887
Sun Life £2,095 £4,535 £7,060
One Family £2,505 £5,605 £8,155
British Seniors £2,000* £4,250** £6,500***

*monthly premium for British Seniors - £10.19 / **monthly premium for British Seniors - £20.52 / ***monthly premium for British Seniors - £30.85

As you can see from the above over 50s life comparison table, taking time to compare over 50 plans could mean you get a much bigger cash sum; over 30% more in some cases.

But it’s not that black and white, so before opting for the biggest cash sum, here are some other points worth noting.

No medical life insurance - but does it pay to be healthy?

Over 50 plans offer guaranteed insurance; no medical life insurance which means you are accepted regardless of the state of your health. With some companies there is one exception though and that is if you are a smoker. You may have noticed from the over 50s life comparison table that One Family, formally known as Engage Mutual has the highest pay out. This is because they offer two levels; one for smokers and one for non smokers. If you were to include the smoker rates, the figures would look more like this:

Company Cash Sum £10 a month Cash Sum £20 a month Cash Sum £30 a month
One Family - non smoker £2,505 £5,605 £8,155

One Family - Smoker

£1,525 £3,265 £5,000

As you can see there is a huge variation between the cash sum paid out for both, so the moral of the story is if you are a non smoker, it may pay to compare over 50 life insurance companies who differentiate between the two. Likewise, if you are a smoker, you may want to compare over 50 plans with companies that don’t ask your smoker status.

The cash sum is guaranteed – but at what cost?

If you’ve done your homework you will have read the negative press about what is known in the trade as the ‘cross over point’ – quite simply the point when you will start to pay more in monthly premiums than the cash sum paid out.

The tricky thing is none of us know how long we are going to live, so as is always the case with insurance, you are paying to cover an unknown risk. The one difference with guaranteed life insurance is that the cash sum will be paid on death, unlike car or home insurance that may never be used.

The average life expectancy for a man is 83 and 85 for a woman, so in the case of a 60 year old as shown in the above over 50s life comparison table, if you live for a further 25 years you will almost certainly have paid more into the plan than the cash sum paid to the family on death. Of course if that proverbial bus comes along and sees you off after 5 years, you could say you’re ‘quid’s in’, as you will only have paid 5 years of premiums but still be covered for the full pay out.

The British Seniors over 50 life insurance plan ensures you will never pay in more than the cash sum paid out but as you can see, that cash sum is lower than with other companies so is that guarantee worth it or are you better off going for a company that offers a larger amount?

Also with some guaranteed life insurance plans you pay the premiums until you die, whereas others cease at 90 but the cover continues, so you might want to take that into consideration.

It’s all about weighing up your options, unfortunately without the use of a crystal ball. What is the state of your health? What age did your parents / grandparents live to? Can you afford to continue paying the premiums? Are you happy that there will be a cash sum for your family, regardless of how much you have paid in premiums to leave it to them?

The money can pay for funeral costs – but will it be enough?

With all the debate about the ‘cross over point’ as mentioned above, a potentially more concerning point about guaranteed life insurance can get overlooked – regardless of how much you have paid into the plan, is the cash sum paid out going to be enough?

Most over 50 life insurance plans offer a fixed cash sum which means that inflation will reduce its value over time. This is worth bearing in mind especially as many customers buy over 50 plans to help with funeral costs.

So for example the average cost of a funeral is currently just under £3,900, therefore an over 50 life insurance plan that pays out £5,000 would probably cover all costs as well as having a little left over for the family. However in 10 years time, if funeral costs continue to rise in the same way, the average cost of a funeral is expected to exceed £6,600, so the £5,000 cash sum from the over 50 plan will no longer be enough.

If you are looking at an over 50 plan to help with funeral costs, take a look at the plans that offer a funeral benefit option as this won’t cost you anything and could increase your cash sum by £200 to £300. You just need to be sure you are happy with the money going directly to the specified funeral director as part payment for their services rather than to your family or estate.

So you can see, when it comes to making the best over 50 life insurance comparison, taking time to consider your options based on your situation and lifestyle is crucial.

Compare Over 50 life insurance

Which plan is the best plan for you?


Ashley Shepherd is an Over 50s Personal Finance Expert

ashley shepherd

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