It seems you can’t open a newspaper or magazine, or watch a television programme, without seeing an advert for over 50’s life insurance, and getting a free pen or camera for getting in touch with the company. But are these specialist age-related life insurance policies worth having? Below we offer a brief outline of the pros and cons of such policies.
First, a little background on what an over 50’s life insurance policy is: In financial and insurance lingo, an over 50’s policy is known as a form of term insurance. Term insurance is the most popular form of life insurance in the UK and it simply means the policy is in place for a set amount of time as long as you keep paying the premiums. To calculate the premium and policy pay-out various aspects of a person’s life are taken into account, including a medical check and history.
If you apply for an over 50’s policy there are no medical checks so you pay a standard monthly fee regardless of your health of financial status. This means the premium is generally higher than a life insurance policy for someone in their twenties with good health, for example.
Life insurance policies for the over 50’s often come with other restrictions too. For example, the policy is unlikely to pay out in the first few years of its life. Although some companies will have a clause that will either pay out the agreed amount or refund the premiums paid so far should you die as the result of an accident.
If you were to take up the policy relatively young, say 60, there is also a chance that you could be paying the premiums for 30 years or longer. So it’s possible that you may end up paying more in premiums than the policy will eventually pay out. However, some polices let you stop paying premiums after a certain number of years, or if you hit a particular age – 85 is quite common – and still keep the cover in place. It depends on the policy of course, so you need to check the details. You should not assume that because you have just turned 85, for example, you can stop paying the premium and still be covered. Most insurance companies invalidate a policy if a premium payment is missed and you may not get any of your money back.
As with all forms of insurance, there are a lot of companies offering premiums, many of which claim to be the best for you. Using a price comparison website such as Confused.com lets you compare different life insurance policies and could help you find the best one for your requirements. Just remember that the cheapest policy is not always the best because companies may exclude conditions to bring the price down, so you have to pay extra to get them added, whereas another policy may be more expensive outright but has the conditions included and could be cheaper once all costs are calculated.
This article was written by Rob Powell – Looking for over 50’s life insurance? Head over to Confused.com to find and compare the best life insurance policies for you.