Guides

A guide to life insurance for the over 60s

7 minutes

Even in your 60s, life insurance can offer your loved ones valuable protection if you pass away

Life insurance might seem like it’s more suited for younger families or those with dependants, but life insurance can actually work for everyone. People take out life insurance policies for a range of reasons.

From your 20s, 30s, and 40s, you’re likely to consider taking out life insurance as a way to offer your family financial support if the unspeakable happens. You may also take it out to insure your mortgage repayments.

As you reach your 50s and 60s, it’s likely your family has grown up and you might have been blessed with grandchildren already. For you, it’s less about paying off the mortgage and keeping your family afloat. Instead, it’s about preserving your estate and leaving your family with some support after you’re gone.

In this guide, we’ll give you some of the important things you need to know about taking a life insurance policy out in your 60s and how it works.

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. 

What is over 60s life insurance?

Life insurance for the over 60s works in the same way as life insurance for any age, except your priorities might be different now compared to when you were in your 30s. In reality, you can cater a life insurance policy to meet your needs and to address what’s important for you.

How can over 60s life insurance help you?

There are many reasons why you might consider a life insurance policy in your 60s, and everyone’s circumstances are different. After all, you might have started a family later in life that you want to protect, or you might want to help your beneficiaries out with paying inheritance tax. The opportunities are almost endless.

At LV=, we know that everyone has different reasons for taking out a life insurance policy. So, whether you’re 30 or 60, a life insurance policy could meet your needs. These are some justifications we’ve seen for people purchasing a life insurance policy:

Reasons for taking life insurance in your 30s  Reasons for taking life insurance in your 60s 
  • Support mortgage repayments
  • Assist your family with financial security
  • Ensure children are taken care of
  • Cover you and your family for any future health problems
  • Offset some or all inheritance tax
  • Cover funeral costs and related expenses
  • Support any final mortgage repayments
  • Leave a gift for your grandchildren

What types of life insurance are available for over 60s?

Depending on the provider you choose, you should still be able to benefit from a range of life insurance policies. It’s worth noting that, as you’re taking out a policy later in life, your premiums might appear higher, especially if your total amount of cover is a larger sum.

1. Whole of life

As its name suggests, whole of life insurance policies last from the point you purchase it until you pass away. Whilst term-life policies might be more suitable for some, whole of life insurance can stretch a bit further for families who need that added level of security. 

You might consider using whole of life cover to support your family with the expenses of your funeral or to provide them with some financial security after you’re gone. It’s possible to gift some of your life insurance death benefit to grandchildren, other family members or loved ones, leaving them with a piece of your estate. Some people choose to start a family much later in life or have children who require continuous care. Parents in these circumstances might choose a whole of life policy so their children and families can continue financially when their loved ones pass away. Whatever your reason for taking out life insurance, you’ll want to ensure you’re covered with a total amount that’s right for you.

Whole of life policies are naturally more expensive than term life though. Factor this in alongside the age you purchase your policy and the total amount of cover you require, and you might find yourself paying much higher premiums as a result.

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

2. Level term cover

Many over 60s select level term cover as a life insurance policy that meets their needs. As you’re nearing retirement age, a fixed-term cover will normally be much cheaper than a whole of life policy. At LV= you can select a term that starts anywhere from 5 years up until the day before your 90th birthday, meaning you could still be covered for up to 30 years if you want to. However, this will depend on your provider. At LV= you can take out cover as long as you’re aged 84 or younger.

Level cover offers the same premiums every month, meaning you can plan ahead as you reach retirement age and can claim your pension. You’ll also be able to decide on a total cover amount based on what you want to be covered for. For example, if you want to leave a small gift behind for your grandchildren or loved ones, you might choose a level cover life insurance policy to do so. The amount you’re covered for won’t change and will be paid out in full if you pass away before your policy expires. However bear in mind that with this type of cover, it doesn’t cover you for the whole of your life, it only covers you for a set number of years. If you live past the end date of your policy, you’ll no longer be covered, and at that age you may find it difficult to get a new life insurance policy.

3. Decreasing term cover

Decreasing term life insurance is often a good choice for people who need to pay off a capital with interest repayment mortgage. When you pass away, any mortgage balance will be transferred over to a loved one. That’s why a decreasing cover life insurance policy can help.

Your initial death benefit should normally reflect the initial amount outstanding on your mortgage. As you pay off your mortgage, your decreasing term amount reduces to reflect this. If you pass away before your policy expires, the remaining amount of your death benefit should cover all, if not most, of your mortgage.

4. Increasing term cover

Another option for the over 60s is an increasing cover life insurance policy. It’s designed to mitigate some of the risk associated with inflation and cost of living prices.

As long as you keep paying your premiums, the amount you are covered for increases each year (either by a fixed amount or by the rate of inflation), as well as how much you pay for it. This could be an ideal solution if you have a much younger family and want to ensure their financial security, or if you have older dependants that require continual care. You could even take out an increasing cover policy to simply offer your loved ones a little extra when you pass away.

Please note, LV= doesn’t offer increasing cover life insurance policies directly through LV.com. If you would like to find out more about this type of product, you’ll need to speak to a financial adviser.

How long does life insurance last?

It can last for any length of time but overall, it depends on the type of policy you take out and whether you’re paying your premiums on time and in full. For example, whole of life insurance lasts from the day you take out the policy until you pass away. With LV=, fixed-term policies can last anywhere from five years to 50 years and must expire before your 90th birthday, however this may differ with each provider.

Can you add critical illness cover to an over 60s life insurance policy?

If you want to protect yourself and your family with critical illness cover, it’s possible to do so in your 60s. After all, you might be in relatively good health yourself but want that extra layer of support in case you suffer a serious or life changing illness. Your provider will also tell you what you’re covered against.

Depending on the provider and the policy, if you’re in your 60’s you might only be eligible to purchase critical illness cover for a short period of time. However, other providers might rule this out completely. At LV=, we offer this additional cover to anyone aged between 17 and 64 years old, and once you have it you could be protected until you turn 80.

If you have started a family later in life, it’s also possible to add children’s critical illness cover at an additional cost. Again, this will depend on your provider and any restrictions they have. In most circumstances, your child could be covered from birth, or the policy start date, until they reach ages 21-23 years old.

Please note, children’s critical illness cover with LV= lasts until a child turns 23 years old.

What illnesses and conditions are covered?

Adding critical illness cover to your life insurance policy is often a just-in-case precaution. However, if you or your child suddenly suffer a serious or life changing illness, it offers your family extra support during traumatic times.

Each provider will protect against different illnesses and conditions, but you could expect the following to be covered in most circumstances:

Adult's critical illness cover Children's critical illness cover
  • Alzheimer’s disease
  • Blindness
  • Cancer
  • Heart attack
  • Stroke
  • Cerebral palsy
  • Child diabetes type 1
  • Cystic fibrosis
  • Down’s Syndrome
  • Patau’s Syndrome

 

Can you have a joint or single life insurance policy in your 60s?

It’s really up to you. If you want some financial security for you or a chosen loved one, you might select a joint life insurance policy. Essentially, these usually only pay out once (whoever dies first) but will offer either yourself or a loved one the death benefit when one of you passes away.

There are many reasons why people in their 60s might do this. You might want to leave something behind or ensure financial income when you’re gone. It can also be faster for your beneficiaries to claim as you’ve already decided to whom your death benefit goes. Once your death benefit has been paid, your partner is no longer covered.

For others, it makes more sense to take out two single life insurance policies. As a couple, you’ll both then have a policy, meaning you’re both covered. When you pass away, your death benefit is paid out to your partner, and other beneficiaries if chosen. As there is still an active life insurance policy for your partner, they continue to be covered until either they pass away, or their term expires.

What are the benefits of life insurance in your 60s?

You can still lead a long, happy, and healthy life when you reach your 60s. That’s why ensuring your family’s security is still a high priority. Life insurance could be one way to achieve that.

Ease expenses for your loved ones

You’re probably still working in your 60s, meaning your family or partner still relies on you financially to provide for them. Whether you’re a single or joint-person household, you can use your life insurance payout to ease any expenses your loved ones face.

For example, you can give enough to help your spouse get by comfortably, or you can leave some to a relative who’s struggling. The choice is yours.

Your family might still rely on your income to pay the bills, the mortgage or other general household expenses. More people are choosing to work well into their 60s now, so it’s more common that this is the case. You might have also decided to start a family later in life and want to support your children as they grow older.

Whatever your reasons, a life insurance policy can offer your family the financial support they need when you’re gone. This should be enough to cover expenses, any loans or mortgage repayments as well as other living costs. It also offers them the security they need when you pass away.

Provide small gifts for your grandchildren

You might have been blessed with grandchildren, or perhaps there’s one on the way. Whatever your circumstance, you can use your life insurance policy to gift small amounts of money to your grandchildren or loved ones.

It’s possible to gift up to £3,000 each year in tax-free gifts to either one beneficiary or split between several people. You can also gift one-off amounts in the event of marriage or registration of a civil partnership of up to £5,000 to a child, £2,500 to a grandchild and £1,000 to any other person. The government has rules on gifting money, so it’s best to keep within the boundaries and check with your financial adviser too.

Pay your funeral costs

Funerals can cost upwards of £1,500 for more intimate proceedings or £4,000 for a full burial and funeral director. There are also added costs for larger ceremonies, cremation, and minister fees. Depending on where you live, the costs might be even higher.

It can feel like a burden to leave this on your family or loved ones to pay for, that’s why a life insurance policy can help with the costs. Whilst you might have considered your funeral arrangements, and agreed to a payment plan, the responsibility to pay this will fall on your loved ones if you pass away suddenly. That’s where a life insurance policy can assist.

Offset some, or all, inheritance tax

If you’re leaving a sizeable estate to someone other than your spouse or civil partner, they’ll have to pay inheritance tax on anything over £325,000. This includes gifts they’ve received seven years before your death.

Depending on your type of life insurance policy (whole or fixed-term) and when you pass away, there’s a chance you could use your life insurance to cover this cost. It’s best to speak to a financial adviser here to determine your best course of action.

Support vulnerable loved ones or dependants

It’s not uncommon that people are living well into their 90s, so you might have frail and elderly parents to think about. Your life insurance payout can be used to support their care and boost their income as they grow older. It can offer you some relief that your parents or other elderly relatives are taken care of.

Likewise, you might also have some vulnerable adults or dependants who still rely on you well into their adulthood. Your death benefit can also contribute towards their needs, such as care or group home costs, as well as any enhanced medical expenses they might need.

FAQs for over 60s life insurance

Can you gift your life insurance?

Your life insurance still counts as part of your estate, so it’s worth remembering that. However, you can gift parts of your life insurance payout to your children, any grandchildren, or any individual. You can also gift the following one-off amounts in the event of marriage or registration of a civil partnership.

  • £5,000 for a child
  • £2,500 for a grandchild, including great-grandchildren
  • £1,000 to any other person you know

Either way, as part of your annual allowance, you can gift up to £3,000 of your money to either one person or split between several people.

Otherwise, if you pass away before your term expires, any death benefit will be paid to your chosen beneficiary.

Can life insurance be used to pay inheritance tax?

It’s possible to do this, especially if you are giving a significant portion of your estate to someone who isn’t your spouse or civil partner. A whole of life insurance policy can be used towards inheritance tax, supporting your chosen beneficiary by paying it in full or partly.

Alternatively, you can use life insurance to offset the inheritance tax of a large gift over the amount of £325,000. As this comes under the seven-year rule, the gift receiver will need to pay inheritance tax if you pass away within seven years. You can take out a fixed-term life insurance policy to cover you until the gift has passed the seven-year mark.

If you are considering this you should speak to a financial adviser who can help you understand the best options for you.

Can you have more than one beneficiary?

Yes, you can have more than one beneficiary for your total death benefit. Whom you choose is entirely up to you. Some providers may allow you to select someone who’s not related to you too. Your list of beneficiaries can include, but is not limited to:

  • Spouse or civil partner
  • Children or grandchildren
  • Other family members
  • Close friends
  • Charities of your choosing

However, you can’t normally pre-select beneficiaries when you take out your policy. The payment is usually paid to the policyowner, and if this is you, it would be included in your estate for tax purposes. Therefore you may wish to consider writing your life insurance into trust to be able to select beneficiaries. It’s important if you are considering this that you speak to a financial adviser or a legal adviser.

Is there a difference between over 50s and over 60s life insurance?

There’s not really a difference between these two life insurance policies as they offer the same things. You can take out a policy in your 50s for similar reasons someone in their 60s might. The only differences might be in the total amount of premiums you pay, the type of cover you want and the death benefit amount. Some providers may also offer an Over 50s Whole of Life policy which differs from Over 50s term life insurance so it’s important not to get these confused.

Looking for an over 60s life insurance policy that meets your needs?

Today, LV= has a choice of life insurance products that can cater to your needs. We can arrange level and decreasing Life Insurance for those over 60, with critical illness cover available for purchase until you turn 64. LifeSearch can offer you independent advice on which protection products are right for you, if you need it - request a call back.

Please note – LV= no longer provides an Over 50s Whole of Life Insurance product to new customers. If you are an existing customer of our 50 Plus policy, and you need to make a claim, you can find details on our contact us page.