What You Need To Know About Over-50s Life Insurance

What You Need To Know About Over-50s Life Insurance

It usually pays to have life insurance in place to take off the financial pressure from your family if you pass away unexpectedly. But did you know that once you’re over 50, there are specific policies out there to cover this stage of life? Whether you need cover will depend on your personal situation, lifestyle and finances. So that you have all the facts before taking the plunge, we asked some of the UK’s biggest insurers to answer the main questions.

What is Over 50s Life Insurance?

“Over 50s life insurance is a type of life insurance that can be taken out if you’re aged between 50 and 80. You pay monthly premiums and, as long as you’ve paid premiums when they’re due, when you pass away, your loved ones will receive a cash sum.” – the team at Legal & General
“If you’re looking to leave your family a guaranteed lump sum when you’re gone, you might want to consider this type of lifetime cover. They could put the cash towards the cost of your funeral, home improvements, a holiday, household bills, or anything else they need it for. If you’re looking for something that just takes care of your funeral costs and safeguards the send-off you want, you might be interested in a prepaid funeral plan instead.” – the Aviva team

How long are you covered for?

“It’s a whole of life policy, so it lasts a lifetime, instead of a specific number of years. You pay a premium each month, depending on your age and how much cover you’d like, and the pay-out is guaranteed whenever you pass away. After that, the cover ends.” – Aviva
“We will automatically stop collecting payments on the policy anniversary following your 95th birthday, or if you die, whichever comes first, but your insurance will continue for the rest of your life.” – the Royal London team

How much does Over 50s Life Insurance cost?

“It depends on what you want the lump sum to be used for and what's affordable, but our cover is available from £5 to £100 a month, depending on your age and how much cover you’d like.” – Aviva 
“Our Over 50s Fixed Life Insurance premiums start from £5 a month, depending on your age and how much cover you need. Depending on how long you live, just bear in mind total premiums paid may be greater than the cash sum payable on death.” – Legal & General

What if you have to stop paying?

“If you need to stop paying, we promise that your family can still get at least half of the pay-out when you die, as long as you’re at least halfway through paying for your policy. That’s halfway from the start of the policy until the policy anniversary date after you turn 95. You stop paying at that policy anniversary or when you die, whichever comes first. You can also take a break from paying for up to six months. After your first year, you can have a break from your monthly payments and still stay insured. Not all providers let you do this, though, and you'll have to make up the missed payments or reduce your pay-out amount after your payment holiday finishes.” – Royal London
“The insurance will still pay out when you die if you cancel your policy or stop making monthly payments, as long as you've made at least half of the monthly payments that were due between when your insurance started and your 90th birthday. The amount paid out will be at least half of your original insurance and will depend on when you stopped making monthly payments.” – the Direct Line team

Who needs Over 50s Life Insurance?

“Our Over 50s Fixed Life Insurance is for UK residents aged 50 to 80, to provide your family with a cash sum after you die, to help contribute towards funeral costs or to leave as a gift. It only takes a few minutes to get cover.” – Legal & General
“Our over 50s Life Insurance can provide up to £15,000 which you can use however you wish, for example contributing to the cost of your funeral, or providing a gift to family and friends. If you're aged between 50 and 85 (81 for smokers) you're guaranteed to be accepted, and you won't be asked any medical questions when you apply.” – Direct Line

Does it ever require a medical?

“At Legal & General, our Over 50s Fixed Life Insurance plan offers guaranteed acceptance with no medical for UK residents aged 50 to 80. Full cover is payable after just one year, but there may be other products available if you want to answer further lifestyle and medical questions.” – Legal & General
“Same – you won’t be asked any health questions or need a medical examination to qualify for our lifetime policy.” – Aviva

Does it cover death from coronavirus?

“Yes, you're usually covered for any death, including death resulting from coronavirus, after your first year, as long as your payments are up to date.” – Royal London

If you’re looking to leave your family a guaranteed lump sum when you’re gone, you might want to consider this type of lifetime cover.

What happens if you die during the first year?

“If you die in the first year of your policy, we return your payments. If you die in an accident (as defined by the various terms and conditions) in the first year of your policy, we pay out the full amount. If you die after the first year of your policy, the full sum assured will be paid out.” – Royal London

Can your partner take out cover as well?

“With us, your partner can also apply for a plan providing they are aged 50 to 80, and a UK resident and reside in the UK for at least 183 days per calendar year. However, as the plans are set up individually, they cannot be held in joint names.” – Legal & General

Will the premiums ever go up?

“No, your premiums won’t go up in regard to our Over 50s Fixed Life Insurance. Just be aware if you stop paying premiums when due, your plan will be cancelled and you won't get anything back.” – Legal & General
“It’s reassuring to know that what you pay each month will never rise. Once you’ve had your policy for 30 years, or from the plan anniversary after your 90th birthday, you’ll no longer pay anything, but your cover will continue. It’s worth being aware that, depending on how long you live, you could pay more in total premiums than the cover amount.” – Aviva 

Can you cash in on the plan?

“Our Over 50s Fixed Life Insurance is not a savings or investment product and has no cash value unless a valid claim is made.” – Legal & General      
“Our Over 50 Life Insurance only pays out when you die – it can’t be cashed in at any time. If you stop paying before you’re halfway through, your insurance will end and you’ll get nothing back. In the first 12 months we will not pay out the full amount of money, unless you die from an accident covered by the policy. Remember, depending on how long you live, you could pay in more than we pay out and, over time, inflation will reduce the value of the pay-out amount.” – Royal London

Is the pay-out exempt from inheritance tax?

“When you pass away, the insurance pay-out becomes part of your estate and goes to the beneficiaries you’ve named in your will. If you put your policy in a Trust, you get control over who the pay-out goes to and it will usually be exempt from inheritance tax.” – Aviva 

What is a Funeral Benefit Option?

“With this option, the cash sum from your plan is paid directly to an agreed funeral director, rather than to your estate. When the time comes, your family simply make one phone call to set the plan in motion, saving them the worry of finding a funeral director. Our Funeral Benefit Option will provide £250 on top of your cash sum amount when your plan is used to help contribute towards your funeral costs with a funeral director, at no extra cost to you.” – Legal & General        

How many Over 50s Life Insurance plans can you take out at once?

“You can have more than one Over 50s Life Insurance plan with us, so long as the total cash sum value for all plans when added together is not greater than £10,000.” – Legal & General        

What needs to be done when making a claim?

“We understand that when it comes to making a claim, it can be a difficult time. All our experienced claims assessors have completed a Samaritans training course which provides them with the skills to support your loved ones and take some of the pressure off. We want to help with a stress-free claims process and rest assured that each claim will be treated individually and personally. We will need the following when we are notified of an Over 50s Life Insurance claim: death certificate; a Will, if one is held, which must be signed and witnessed; the date of the policyholder’s death; the claimant’s contact details; and the policy number. Our claims team will let you know if there is anything else needed at the time of claim. From there, we'll deal with the claim as quickly as we can, but sometimes we need to refer to third parties, which can cause a slight delay. But our staff will always be on hand to discuss the next steps and answer any questions in the meantime.” – Legal & General        
Visit LegalAndGeneral.com, Aviva.co.uk, RoyalLondon.com & DirectLine.com for more information.
*DISCLAIMER: Anything written by SheerLuxe is not intended to constitute financial advice. The views expressed in this article reflect the opinions of the individuals, not the company. Always consult with an independent financial advisor and check all terms and conditions before making an investment or personal finance decision.

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