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 or store gift card to boot! In this article, we work out what these policies are and whether they offer value for money.
What is over-50s life insurance?
Over-50s life insurance is a life insurance policy that insures you for the rest of your life, until you die and offers a guaranteed lump sum of tax free cash. Here are the main features of an Over 50s life insurance.
- acceptance is guaranteed as long as you're over 50 and under 80 usually
- no health questions are asked and no medical examination is needed
- premiums are fixed
- most policies pay out a fixed amount on death
- the level of cover available is usually between £1,000 and £20,000
- depending on how long you live, 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
- can be used to cover funeral costs
Pros and cons of over-50s life insurance
- guaranteed life 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
- a waiting period applies before you are fully covered
- 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 life insurance plan.
Term insurance - as the name suggests this type of policy will only insure your life for a number of years referred to as the term. The term is decided at outset and once the term expires then the life cover ceases. Term life insurance is usually more cost-effective than whole of life insurance policies
Over 50s life insurance with free gift
A free gift can be a great incentive to buy your life insurance cover 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"