If you’re considering your life insurance options now that you’re over 50, we understand there are many choices, and it can be difficult to decide. For instance, should you opt for an Over 50s plan? Take out a term life insurance policy? Or simply put savings aside?
Everyone’s circumstances are different, and at the end of the day, you want to know that your loved ones are looked after once you pass away. That’s why we’ve compiled a helpful guide to help you understand your options.
The information on this page should not be considered as financial advice. If you are unsure what’s right for you, please make sure you speak to a Financial adviser.
When you are over the age of 50, there is a choice of life insurance options open to you. There are specific over 50’s life insurance plans available, and also more standard policies that pay out a fixed sum when you pass away. Alternatively, you can opt for a life insurance policy over a set amount of years , that pays out if you pass away during that period. We summarise the key differences below.
Over 50s insurance plans typically cover you for the rest of your life, working as a ‘Whole of Life’ policy.
These types of plans tend to be used to help towards things such as helping towards funeral costs, or perhaps providing a small inheritance, when you pass away.
Over 50s insurance plans provide a guaranteed payout when you die. You usually are not asked any questions about your health, and usually you are guaranteed to be accepted for cover. However because of this, the cost of the cover is relatively expensive for a small amount of cover, and most insurers won’t cover you in full until you’ve held the policy for a specific period, such as 12 months. So, it’s really important that you check the policy conditions so you know exactly how long this period will be.
Non-age-specific whole of life insurance policies are also an option. Whole of life insurance (sometimes known as life assurance) requires medical history to be checked prior to acceptance. These medical checks mean that acceptance isn’t guaranteed, and it may not suit if you have poor health or pre-existing medical conditions.
Whole of life insurance plans provide a guaranteed payout when you die. The payout that is stated in your policy when first taking out cover will stay the same when you pass away – this is the amount that your loved ones will receive. They will not have to pay any income or capital gains tax on this payout.
Unlike a ‘Whole of Life’ policy, a ‘Term’ policy provides cover for a set amount of time, which typically ranges from 1-50 years or more, depending on the policy chosen. The basis of a term life insurance policy can work in several ways, it can be a ‘Level Term’, a ‘Decreasing Term’, or an ‘Increasing Term’.
If you are over the age of 50, you can take out a term life insurance policy depending on the insurer’s specific requirements. At LV=, our life insurance policies are available to UK residents aged 17 to 84 for decreasing and level cover (with cover expiring before you reach age 90). If you want to apply for a policy that can be inflation-linked, then we have partnered with LifeSearch to offer independent advice.
Term life insurance policies pay out if you die within the plan’s term and give you the flexibility to choose the cover you need specific to your circumstances. This financial support can be used to help with paying off a mortgage, assisting with a child’s further education and more.
Terminal illness cover is often included in life insurance policies, but it’s important to clarify the specifics of this with your insurer.
Whether life insurance is worth having is dependent on several factors. If you aren’t sure, it’s best to seek advice. At LV=, we have chosen to partner with LifeSearch to offer independent advice on which protection products are right for you.
Key considerations for whether life insurance is right for you include:
Ultimately, having life insurance in place can help those you leave behind who would suffer a financial loss in the event of your death. Whether that’s helping to pay off a mortgage, loan, or to keep up with rent payments, or to leave gifted funds behind.
As above, whether savings or life insurance are more beneficial to you is dependent on your circumstances. For instance, if your mortgage is paid off and you are satisfied with the amount in your savings account, then life insurance may not be something you need. But if you have larger outstanding payments and want peace of mind left for your family, life insurance may be better suited to your circumstances. The benefits of a savings account over life insurance are that you can access your funds whenever you want, and you have the flexibility to deposit funds when available.
How much a life insurance policy costs will depend on several factors. It will depend on:
Some insurance companies offer critical illness cover as an additional option with their life insurance – so don’t assume it comes as standard. Critical illness gives you additional peace of mind that you’re protected should you be diagnosed with a specified illness (as defined by the insurer) and your illness meets their definition.
This depends on the insurer – at LV=, you can apply for life insurance until age 84 for decreasing and level cover, so it’s best to check.
LV= no longer provides Over 50’s whole of life cover, known as a 50 Plus policy, or any whole of life insurance products.
Today, LV= has a choice of life insurance products available and can arrange level and decreasing Life Insurance for over 50s. LifeSearch can offer you independent advice on which protection products are right for you, if you need it - request a call back.
If you are an existing customer and need to make a claim then you can do so on our contact us page.