Over-50s life insurance - what is it & is it worth buying?
You have probably seen the advertisements on TV or in the newspapers for over-50s life insurance. Guaranteed acceptance with no medical questions asked and a free pen to boot! So what are these policies and do they offer value for money?
What is over-50s life insurance?
- over-50s life insurance is a whole life insurance policy with a guaranteed sum paid on the death of the life insured
- one of the big advantages is that acceptance is guaranteed
- no health questions asked and no medical examination
- premiums are fixed
- most policies pay out a fixed amount on death so you could pay in more than is paid out on death
- normally premiums must be paid for a minimum of one or two years before a payout will be made
Pros and cons of over-50s life insurance
- guaranteed cover
- no health questions asked or medical required
- low minimum premium
- premium fixed at the outset
- could pay in more than is paid out on death
- level of cover limited
- the cost of premiums for healthy individuals may be higher than normal life insurance due to guaranteed acceptance terms
What is the alternative to over-50s life insurance?
Whole of life insurance - if you are in good health and still in your 50s then the ordinary whole of life insurance may offer better value for you in the long run. If you are accepted for a whole of life policy then the payout could be as much as 40% higher than an over-50s plan.
Term insurance - as the name suggests this type of policy will only insure your life for a number of years. The term is decided at outset and once the term expires then the life cover ceases. This could be an affordable option if you are over-50 and still have dependent offspring and require a larger sum assured.
Over 50s life insurance with free gift
A free gift can be a great incentive to buy your life insurance but you do need to consider the cost of such incentives if what you pay into the policy will exceed what is paid when you die. As with many such incentives, the insurance companies have usually factored the cost into your policy. Nevertheless, we have taken a look at the best offers and summarised them for you to read in our article, "Over 50s life insurance: We rank the best FREE gifts"