Life Insurance for Over 50s
Life insurance products for the over 50's have become an increasingly popular way for individuals to plan for the inevitable costs that occur once they have died. For the over 50's market, life insurance policies can provide finance to cover the cost of funeral expenses, while also providing a legacy to pass onto family members.
Providing life insurance cover for those over 50 years old has become a substantial niche sector of the life insurance market. Typical life insurance products do not cater for the older market and many would-be customers in the autumn of their lives find it difficult to acquire coverage from the mainstream life insurance arena.
Offering life insurance for older generations represents a greater risk for insurance companies and so many shy away from this market. However, inevitably others have moved to fill the void left and now customers in their 50's (and older) have a good range of competitive life insurance products to choose from.
While more and more mainstream life insurance companies are entering the over 50's market, later-life life insurance policy seekers can also turn to specialist organisations and providers dedicated to serving the financial needs of the older generations.
As with mainstream life insurance, some providers require customers to undertake a medical before commencement of their policy. However, many life insurance providers now offer policies that do not require a medical to customers up to the age of 80.
One key difference of over 50's life insurance is the provision of literal coverage for life. While most mainstream products designed for younger generations have a finite term length, most over 50's plans will cover the policyholder for the remainder of their life. In addition, some over 50's life insurance policies will offer an age point at which premium payments will no longer be required, while coverage will be maintained until death. Typically, the cut-off age for this facility is 85. However, it must be noted that once the policyholder reaches the designated age when premium payments stop, there is a chance that the lump sum paid on death could be less that the total amount paid in premiums.
As over 50's life insurance products are distinctive from the mainstream offering, different rules are applied for paying out on claims. Typically, over 50's life insurance providers stipulate in their policy wording that a claim made in the first year of the policy term will only receive the value of the premiums paid in. Some more generous providers offer up to 150% of the value of the paid premiums, but the stipulated full lump sum will not be paid (except in certain unique circumstances) within the first year. Some over 50's life insurance providers extend this rule into the second year.
Life insurance policies for the over 50's market start from as little as £8 a month. However, selecting higher premiums will ensure a larger lump sum payment when claiming. Customers should note that the lump sum normally counts as part of your estate and may be subject to inheritance tax.