Life insurance for senior citizens

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How does life insurance for senior citizens work?

Senior life insurance works in many ways, and a lot depends on the type of policy you have. For instance, over 50s life insurance provides a guaranteed payout for those over 50. These policies don’t have an end date, so you’ll always be covered for your chosen amount of cover if you keep up with the regular payments.

As these types of policies don’t have an end date they are usually more expensive as they can run for a long length of time, when compared to standard life insurance. However, they can be more appropriate if you have pre-existing health conditions, as they have guaranteed acceptance, and tend to not take any health-related information into account.

Whole of life policies are like over 50’s life insurance in that they cover you until you die, whenever that may be. They can also tend to cost you more, as they take account of your personal medical and lifestyle history.

Term life insurance is different in that anyone over 18 can buy a policy. But you may find there’s an upper age limit when applying as well as a maximum age for making a claim. Many of these policies become more expensive to take out the older you get, and cover only lasts for the length of time you’ve chosen. Once the plan ends, you’re no longer covered.

‘Gift inter vivos’ cover is a specialist type of term life insurance, used only for inheritance tax planning, where you’ve given a financial gift before your death. It’s usually only available through financial advisers.

LV= life insurance policies are available to UK residents aged 17 to 84 for decreasing and level cover, with cover ending when you reach the age of 90.

Is life insurance for senior citizens right for me?

Taking out life insurance when you’re young and healthy delivers the best value from your policy. However, there are still benefits to life insurance for senior citizens.

Below, we list some of the key advantages and disadvantages of senior life insurance.

What life insurance options are there for senior citizens?

If you’re a senior citizen considering life insurance, there are multiple options available to you. Here is a round-up of life insurance policies that might suit your personal circumstances:

1. Whole of life cover

Whole of life insurance, also known as whole of life assurance, pays out a lump sum if you pass away at any age. You’ll be covered for the rest of your life as long as you keep up with the policy premiums. These policies tend to be underwritten. This means the insurance company will take into account your health details when deciding on your cover, and its cost.

When you buy whole of life cover, you’ll choose the payout amount at the start and then pay regular monthly premiums for the policy. Because a payout is guaranteed, whatever age you pass away at, whole of life insurance can be more expensive than other types of cover. Total premiums paid can be more that the amount eventually paid out at claim.

LV= no longer offers whole of life insurance as a product.

2. Over 50s life cover

Over 50s life insurance can provide a modest but guaranteed payout for your loved ones or chosen beneficiaries when you pass away. These plans are typically used to fund funeral costs or leave a small inheritance when you’re gone.

Most over 50s life insurance cover is available if you’re aged between 50 and 80 when you apply. Your provider is unlikely to ask questions about your health, you won’t need to pass a medical, and you’re guaranteed to be accepted.

With over 50s life cover, your premiums stay the same for the duration of the policy. However, because you’re certain to be accepted regardless of your medical history, the cost of cover can work out expensive. If you live a long life, it could mean that you’ll pay more for the policy than the value of the payout when you die.

LV= no longer offers over 50s life insurance as a product.

3. Gift inter-vivos cover

This type of specialist cover is like a decreasing term policy, but is specifically designed to cover the potential inheritance tax payable if you die within 7 years of making a financial gift, to anyone other than your spouse/civil partner. There are lots of things to consider relating to your financial circumstances when taking this out and so it’s usually only available through a financial adviser.

4. Life cover for the over 60s

By the time you reach your 60s, your circumstances have probably changed from your younger days. Your children may have left home, your mortgage is paid off, you may be drawing a pension after retiring from work, and you may have grandchildren to consider.

It’s at this stage in life that you may want to review your finances and take out life insurance that’s better suited to your current situation. Rather than paying off the mortgage, your focus could shift to protecting your estate and supporting your family after you’ve gone.

Depending on your insurance provider, you can still benefit from a range of life insurance products when you enter your 60s. Again, your premiums may be higher because you’re taking out a policy later in life.

Life insurance options for the over 60s include:

• Whole of life cover: Active from the point of purchase until you pass away.
• Level term cover: Fixed-term cover for anywhere between 5 years until the day before your 90^th birthday.
• Decreasing term cover: As you pay off any remaining capital and repayment mortgage, your amount of cover reduces.
• Increasing term cover: The amount you’re covered for and the monthly premium you pay increase by either a fixed amount or in line with inflation.

For more comprehensive information on your policy options and the key considerations, read our life insurance for over 60s guide.

5. Life insurance options for over 65s

As you approach 65, you’re probably thinking about retirement or may have given up work already. It’s an opportunity to look at your finances, your insurance cover and what your loved ones may need if you die.

At this stage, your reasons for having life insurance may have changed. You may no longer need cover to protect young children or a large mortgage, but you might still want to help with funeral costs, support a partner, leave money for children or grandchildren, or cover unpaid bills.

Life insurance for over 65s can work for different needs, depending on your age, health, budget and the type of payout you want. Some policies may ask medical or lifestyle questions, while others, such as over 50s life insurance, may offer guaranteed acceptance without a medical.

Life insurance options for the over 65s may include:

• Whole of life cover: Designed to stay in place for the rest of your life, as long as you keep paying your premiums.
  
• Level term cover: Provides a fixed payout if you die during the policy term.
  
• Decreasing term cover: Often used to help cover a repayment mortgage, with the payout reducing over time.
  
• Over 50s life insurance: Usually offers guaranteed acceptance within the provider’s age range, although the payout may be lower than some other types of cover.

You may need to weigh up the benefits of life insurance and the amount of cover you want against the cost of the policy itself. Therefore, it’s worthwhile considering all the options open to you.

6. Life insurance options for the over 70s

Getting life insurance over 70 may still be possible, although your options may be more limited than they were earlier in life.

Many people look for life insurance in their 70s to help leave money towards funeral costs, support a partner, provide a small gift for loved ones or help with estate planning. Others may still have financial commitments, such as a mortgage, loan or dependant who relies on them.

Many insurers offer over 50 life insurance rather than cover specifically aimed at people over 70. These policies may offer guaranteed acceptance if you’re within the provider’s age range, although the payout may be lower than other types of life insurance.

You may also be able to consider term life insurance, decreasing term life insurance or whole of life cover, depending on your age, health and how long you need cover for. Our Life Insurance can be taken out up until your 85th birthday.

It’s important to realise that some providers have an age limit of 80 for taking out a policy. As a result, fewer options may be available the older you get and the longer you delay your decision.

Before taking out life insurance over 70, check whether you’ll need to answer medical questions, whether there’s a waiting period, how long the cover lasts, how long you’ll need to pay premiums and what happens if you stop paying.

7. Life insurance options for the over 80s

Again, you may have fewer senior citizen life insurance choices after you turn 80. Even so, there are still providers out there who offer life insurance cover up to your 85th birthday.

At this stage, life insurance is often used to leave a smaller lump sum for loved ones, help towards funeral costs or support estate planning. The amount of cover available may be lower than if you had taken out a policy earlier in life, and premiums may be higher.

If you take out whole of life cover or level term cover, you are likely to be asked questions about your health and medical history. However, an over 50s policy means you’re guaranteed to be accepted by any provider who offers life insurance for over 80s, as long as you meet their eligibility criteria.

Before applying, check the provider’s maximum age limit, whether there is a waiting period, whether the policy has a cash-in value and what your loved ones would receive if you died shortly after taking out cover.

Are you looking for life insurance for senior citizens?

LV= offers a range of life insurance options that cater for your needs, whatever your age. From level term cover to decreasing life insurance, our friendly advisers are available to help. Contact us today.