Over 50s Life Insurance Explained

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By Cai Bradley

on Wednesday 12 June 2019

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Although term life insurance is great for people with young children and a mortgage to pay off, those over 50 years old with no dependent children and no mortgage payments to make have very different desires and needs, meaning that their insurance requirements also vary.

This is where over 50s plans come into play, as they offer better suited benefits for those who are mortgage-free and have no dependants. Here, we outline what over 50s life insurance offers, its benefits, and the best policies available in the UK. Click the links below to skip to a section...

What is over 50s life insurance?

How does over 50s life insurance work in the UK?

Why buy over 50s life insurance?

How much does over 50s life insurance cost?

Minimum payments on life cover for over 50s

Can I put my over 50s policy in trust?

Which is the best over 50s life insurance?

Other types of life insurance

What is over 50s life cover?

Over 50s life insurance is a type of policy designed for people over the age of 50, and similarly to other types of cover, it pays out a lump sum when you pass away (as long as you keep up with the monthly payments).

The payout is often used to pay towards funeral costs, to cover debts, or simply as a gift to loved ones that you leave behind. People tend to opt for over 50s life insurance policies for a variety of reasons, including the following benefits:

Applicants are guaranteed to be accepted (no medical checks)
Policies usually offer fixed premiums and fixed payouts
Some plans provide free cover when you reach a certain age

How does over 50s life insurance work in the UK?

Over 50s plans work somewhat differently to other typical policies in that you need to be over 50, but generally, the cover works in a similar to a whole of life policy.

When you apply for over 50s life insurance, the application is very short. You’ll only be asked one question: whether or not you smoke. If the answer is yes, then this is likely to double your premiums. However, at Unite Life, we can search through all the policies available with the top UK life insurance providers to get you the best deal possible.

Once you’ve completed the quick application with a trusted and experienced life insurance expert and you’ve made your first payment, your cover is in place.

Each insurance provider has certain terms and conditions for each policy, so be sure you are fully aware how your policy works and that you’re happy with it. For more help and information, call us today at Unite Life, obligation-free.

Guaranteed to be accepted

One of the main reasons why over 50s plans are so popular is because people applying for the insurance are typically guaranteed to be accepted, as there are no medical or health checks required due to the nature of the policy.

This means that people who have suffered with illnesses previously will not be charged more than the going rate, as the cost of over 50s life insurance is generally based on the level of cover and age of the applicant, rather than their medical history.

Fixed premiums

Premiums for over 50s life insurance in the UK are usually fixed, so you decide on a premium that suits the level of cover suitable for you and your financial situation, and it will stay at that price for the entirety of the policy.

The amount you pay in premiums can range anywhere from £10 to £50 on average, depending on your provider, level of cover, your age and whether your smoke or not.

What if I miss over 50s life insurance payments?

If you consistently miss payments, your over 50s life insurance essentially becomes worthless.

It’s hugely important that you agree a contract that consists of monthly payments that you know you can afford, before you sign on the dotted line. You must keep paying your premiums, otherwise your insurance becomes invalid, you will no longer be covered and the money you paid in will be lost.

Fixed lump sum pay-outs

As well as fixed premiums, most over 50s plans offer a fixed lump sum pay-out – meaning that the amount your beneficiaries receive when you pass away will be set at the time the contract is signed and will remain static.

Fixed pay-outs provide policy holders with a level of certainty and reassurance, knowing exactly how much will be paid out to their loved ones. There are, however, some risks involved, which we’ll discuss in due course.

Early pay-outs

Early pay-outs are available with certain policies – if you fall very ill or are diagnosed with a terminal illness during the first two years of the policy, for example.

This means that your beneficiaries will receive the lump sum payout while you’re being treated for your illness, which they can then use to help cover any costs that arise as a result of the illness or loss of earnings.

Remember that every provider and every policy has different terms and conditions, so always be sure you know the details of your policy and that it suits your needs.

Don’t hesitate to contact us for more information today at Unite Life, obligation free.

Free cover after 90

An added benefit of some over 50s plans is that your cover becomes free when you hit 90 years old. It’s simple, once you reach 90, you no longer have to pay premiums but your insurance cover remains in place.

Are there any risks with over 50s life insurance in the UK?

One problem with the fixed payouts that over 50s plans offer is that you could end up paying in more than your beneficiaries get back, because most policy holders will continue to pay in until they die, even if they’ve paid in more than their payout is worth.

The longer you live, the more you pay, but the amount paid out remains static. Therefore, if you pay premiums for 35 years, your pay-out will be the same as it would be if you had paid for just 10 years.

Another problem associated with over 50s life insurance is the possible risk of your payout eroding with inflation. Before you agree to a fixed policy, it’s worth asking yourself whether or not your pay-out will still be enough 20 to 30 years down the line. If you want your policy to rise in accordance with inflation, you should consider index-linking your policy, which can be done with certain providers. For more information on this, contact us today!

Why buy over 50s life insurance?

There are many reasons why people decide to get life insurance when they’re over 50; whether they want to ensure their family’s financial security or simply want to reduce the stress placed upon their loved ones by covering the cost of their funeral.

There are also the aforementioned benefits, including the fixed payments, fixed lump sum pay-out, the fact that you’re guaranteed to be accepted, and free cover after your 90th birthday.

Using over 50s life insurance to pay for funeral costs

Naturally, most people taking out over 50s cover will be starting to think about how they will cover the cost of their funeral. Although they may not necessarily feel as though they’re close to the end of their life, the sooner funeral costs are sorted, the better.

The average cost of a funeral in the UK is £3,757, and the added stress it places on your loved ones at an already-difficult time is easily avoidable by including a funeral plan within your over 50s life insurance policy.

These funeral plans, or funeral benefits, either include a bigger pay-out to cover the cost or a discounted funeral with certain companies. For example, you could receive 5-10% on top of your lump sum pay-out or a discount of £200 off your funeral with certain plans.

Our team of trained advisers are on-hand to help you get the best life insurance deal to suit your situation, so get in touch by calling us for free or completing our short contact form and we will contact you at a time convenient for you.

How much does over 50s life insurance cost?

The cost of life insurance for over 50s starts at around £5 a month in the UK, with the average being £10-£50, but the price of your premiums depends heavily on the level of cover you opt for, as well as your age and your smoking status when you sign up.

Each provider differs, but over 50s plans are usually affordable to those who require it. There are handily no medical checks, meaning that you will not be paying more for your premiums if you have been diagnosed with an illness in the past. 

Is over 50s life insurance worth it?

As we mentioned, there are risks with over 50s life insurance, including the possibility of paying in more than the cash lump sum pays out with a fixed policy, as well as the danger of your fixed pay-out not being sufficient due to inflation.

However, if you are of a certain age and want an affordable life insurance policy that requires no medical checks, includes the option of fixed premiums and gives you the reassurance of a fixed pay-out, there’s no reason why you shouldn’t consider over 50s cover.

It’s also worth reiterating the funeral benefits that are available with some policies, which you can talk to our team of specialist advisors about today, by calling our free telephone number below or completing our short contact form.

Minimum payments on life cover for over 50s

Before your policy will release the maximum pay-out, you are usually required to have paid into an over 50s plan for a minimum of one or two years, depending on the provider. This is known as a deferment period.

If you pass away before that period is over, beneficiaries will typically receive a pay-out that equates to the cost of the premiums you had paid up until your death, plus 50%, rather than the full payout originally agreed.

However, there are cases where the full payout is released if the policy holder passes away during the first few years of the policy, for example, if their death is caused by an accident.

Again, be sure to double check what your policy covers you for, as terms may differ from provider to provider.

Can I put my over 50s policy in trust?

As it counts as part of your legal estate, your beneficiaries could be liable for paying the 40% inheritance tax on your life insurance funds when it is released, which means they could end up receiving far less than you were hoping when you initially took out the policy.

The best way of avoiding the inconvenience of inheritance tax is to write your policy ‘in trust’, which will ensure that the proceeds of your policy will be paid directly to your beneficiaries, rather than your legal estate.

It costs no extra to write your life insurance in trust, and it gives you far greater control regarding who the payout goes to and what it is used for.

Which is the best over 50s life insurance?

It’s difficult to determine which over 50s cover is the best for you without knowing your specific needs and situation, but a good policy typically includes the following:

Guaranteed acceptance
Funeral benefits
Option to write it ‘in trust’
Premiums end at a certain age (usually 90)

If you would like tailored advice regarding the best over 50s life insurance to suit you, feel free to get in touch with our friendly and experienced team and we will be more than happy to help.

Term life insurance, whole of life plans and critical illness cover

If you feel that over 50s cover isn’t for you, or want to explore the other options available, there are plenty of insurance types that we can help you with here at Unite Life. Our trained advisors can help you find the best deals regarding term life insurance, whole of life insurance and critical illness cover, additionally to over 50s plans and financial protection.

  • Whole of life insurance: pays out to your loved ones when you pass away, regardless of when that may be.
  • Term life insurance: covers you for a certain amount of time (has a start and end date unlike whole of life insurance), but it is a far more flexible option.
  • Critical illness cover: provides an extra level of cover should the policy holder be diagnosed with a critical illness or injury (illnesses covered depends on the provider’s policy terms).

You can learn more about these alternate policies by giving our team a call, or completing our short contact form and we will be in touch at a time that’s most convenient for you.

08000 106 194

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