For some people, over 50s life cover might prove to be an attractive proposition.
In this brief blog, Over50choices will be examining what’s involved in typical over 50s life insurance.
Changing over time
For many of us, knowing that we have made some financial provision for the loved ones we might leave behind is an important pre-requisite for our peace of mind.
What we need to achieve can change as we age and progress throughout the life cycle. For example, younger new parents in their 30s may have a very different set of criteria for life cover than someone who is in their 60s.
As we age, our debt profile and the nature of our dependents typically change. For example, a father or mother in their 30s may still have relatively young children and some decades to go before their mortgage will be paid off.
By contrast, someone in their 50s or 60s may be financially stable without a mortgage and with children who have themselves become adults and who are now self-sufficient.
Typically, younger people with younger families may opt for a form of life insurance that is closely aligned with their existing debt and family position. That might include having cover to pay off any outstanding mortgage in the event of their untimely death and ensuring their children are provided for in terms of schooling and university etc.
However, somebody aged 50 may be rather more focused on leaving behind a sum of money to help pay their funeral expenses (which, as we reported recently, have increased by a staggering 112% since 2004). Or, perhaps, providing some form of legacy for their children and grandchildren.
That is why over 50s life cover and what might be called traditional life insurance offer different provisions aligning to their policyholder’s objectives.
What is over 50s life cover?
Typically, this type of policy is not linked to the policyholder’s objectives to pay off a large outstanding mortgage upon their death or to provide financial stability for a young family left behind.
As such, the sum insured may be perhaps lower than that associated with traditional life insurance aimed at younger individuals. That, in turn, might mean that the over 50s life cover insurance premiums are lower, even allowing for the fact that, statistically speaking, as we age, the risks of death increase.
In some cases, the policyholder may insure their life for a relatively modest sum, sufficient only to cope with helping towards their funeral and related expenses. In others they may include amounts to ensure that their families are able to enjoy some special event in their memory.
Other characteristics of an over 50s life plan might include:
- in most cases, you may have guaranteed acceptance and no medical provisions, which may be very useful if you’re suffering from an existing medical condition or have been refused traditional life insurance cover elsewhere;
- it is typically a one-off lump sum payment when you die (providing all your premiums have been paid up to date);
- there is no savings component with this type of over 50s life cover policy. That means it has, as such, no “cash in” residual value.
Is this type of policy for you?
In the modern world, it is typically not possible to make automatic assumptions about a person’s financial and family situation based on their age alone.
Some people over 50 may continue to have significant outstanding mortgages and perhaps even younger dependent children. In such cases, you may choose to continue with standard life cover policies.
If, however, you have been refused life cover elsewhere or have a pre-existing medical condition – or you simply don’t have the budget for a traditional life insurance policy – then over 50s life cover may be the most suitable solution for you.