Policies aimed specifically at people over 50 are on the rise. Do you need to look into it? Start by asking yourself these questions…
Do I need it?
It depends. The main reasons people start to think about an over-50 life plan is because they reach the milestone and still have dependent children (this is only likely to increase as people have children later in life); or because they want to maintain their spouse’s standard of living after they’re gone; or they’re worried about how they’ll cover the costs of funeral arrangements.
If you shook your head as you read any or all of the above, then you may not feel the need for a life insurance policy at all. Even if you do fit the bill, there are always other ways to invest your money to ensure these possible eventualities are taken care of. Which is why companies ensure their 50+ life cover is so hassle-free to arrange – no medicals, no questionnaires.
Why is it that anyone can apply?
The main over-50s insurance policies don’t require medical or health questions to be answered, so cover is guaranteed. It’s easy to forget that, despite the policy having ’50′ in its title, these policies are very popular with people in their 60s or 70s, who may not have many assets or savings. Of course, the older you are when you apply, the lower the assured sum will be.
It’s important to realise that many 50+ life insurance plans are organised so that if you were to die within the first two years of the policy, instead of paying out the full value of the policy, instead the premium payments you’d already made would be refunded. Some companies, such as National Friendly for example, only apply this ‘refund rule’ for one year, after which you’re fully covered as long as you continue paying your premiums.
What affects my premium?
If you smoke, and your gender – both have an effect on how much you pay versus how much your policy pays out.
What are the drawbacks?
If you have a fixed premium policy, the longer you live, the more you’ll pay into it, and therefore your estate may end up with less money than you paid into the policy.
Inflation, over the duration of the policy, could reduce the real-term value of the final payout you settled on when you took the policy out to begin with.
You should also consider that you can’t cash the policy in, as you can with some pension schemes or other insurance policies. It will only pay out in the event of your passing.
What are the benefits?
With a fixed policy, and most life cover for over 50s falls into that category or offers that option, you set a premium you can afford to pay every month, so you know what your budget is.
In most cases, when you reach 90 years old (actually the last premium date before your 90th birthday), you no longer have to pay premiums, but the cover continues. It’s the same if you’ve held a policy for a certain number of years and you go to live in a care home.
Having a fixed sum that you know will be paid out when you’re gone is the prime motivator for people to look into over-50 life cover policies. If it’s something you worry about, then look into it further, but make sure you compare products on the market very carefully.
They needn’t be expensive either – National Friendly offers policies from as little as 30p per day, and their 50 plus life insurance can be easily arranged online, or over the phone.
For more information, please call today on 0800 195 9246 or email enquiries@nationalfriendly.co.uk to speak with a friendly and knowledgeable advisor.