50 plus? Time to review your life insurance options.
Are you worrying about life insurance and feeling overwhelmed? Thereâ€™s also no denying that costs creep up as you get older. Donâ€™t panic because help is at hand. Take a look at this handy guide to assess your options:
50 plus life insurance policies
These policies are specifically designed for people 50 and over, so the benefits are tailored to your needs. A 50 plus life insurance policy will payout a lump sum of money to anyone of your choosing after your death.
And with this type of life insurance you are guaranteed acceptance regardless of your medical history.
What are the cost implications?
Costs are entirely determined by you and your affordability, but many insurance companies will set payment premiums of between Â£5 and Â£100 per month. These payments will go towards determining the final payout.
Before calculating a final payout insurers will also take into consideration your age. As you would expect, the older you are when taking out your insurance the less you can expect as a lump sum.
When calculating your affordability, it is important to keep in mind that most over 50s life insurance policies insist that, regardless of your age, premiums are paid until you die.
This means that if you cease to make your monthly payment, your policy will end and all money paid in until that point will be lost.
If this is a concern, it is possible to find policies which stop taking premiums when you reach a set age or once you have paid in for a specified length of time, such as 25 years.
What are the exclusions?
As with most life insurance policies there are likely to be exclusions which mean that there wont be a payout in the event of your death. These exclusions usually include:
- If you die within 12 months of the policy being taken out
- If you commit suicide
- If you die as a result of alcohol or drug abuse
However, it is possible for there to be exceptions to these scenarios resulting in the full payment being made to your chosen recipient. One such example is if you die within the first year of your policy due to an accident.
Why do I need life insurance specific over 50â€™s life insurance?
Before applying, consider these pros and cons:
- There is no uncertainty around the final payout, itâ€™s a guaranteed sum determined at the start of your policy
- You are guaranteed acceptance, even with a less than perfect medical history
- The final payout is more than the amount you have paid in over the short term
- It is unlikely that the policy will rise with inflation. This means the value of your payout could weaken over time
- There are no advantages to being fit and healthy. Your payout will be equal to someone with a poor medical history
- The final payout could be lower, in the long term, than the amount you have paid in
What other life insurance options are available to me at 50?
Term Life Insurance
- This policy could be a great option if you are healthy and meet the criteria to be accepted. It can mean that you minimise the risk of paying more in premiums than your recipient will receive in final payout.
Whole Life Insurance
- In a nutshell, there arenâ€™t any term restrictions with this type of life insurance as the insurance will payout whenever you die. It is worth noting that whole life insurance can be harder to secure the older you are due to your life expectancy and health.
- A great option if paying for your funeral is of concern to you. This policy enables you to pay by monthly instalments or lump sum into a funeral payment plan. The risks associated with this option is there is a possibility that the company you pay could go out of business by the time you pass and all money will be lost.
- Some people choose to pay into a savings account on a monthly basis and make provisions for a lump sum to be put aside to a chosen recipient in the event of their death.