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Life Insurance for Over-50s

Last updated: 20. 05. 2020

Life Insurance for Over-50s
Standard life insurance policies can quickly get very expensive once you’re over the age of 50. Monthly premiums will increase significantly the older you get and there are likely to be specific conditions that you need to meet in order to get the cover you need. 
 
This is where over-50s life insurance will work much better for you. It is likely that you need very different things out of your life insurance than when you were younger. If you no longer have children who are dependent on you and you aren’t paying off any debts, then it is unlikely that you will be looking for the same thing. Over-50s life insurance offers you options that are tailored specifically for your age bracket. 
 
You can use your payout for anything, but it can be especially important for covering your funeral costs or leaving money for your family when you are gone. You will pay monthly premiums and then receive a lump sum after you die. It offers a much more affordable way of giving back to your family after you have gone.

How much over-50s cover can I get?

Over-50s cover provides a cheaper alternative for you compared to other standard life insurance policies. However, it is likely that age will still impact the cost of your monthly premium - starting the policy in your 50s is likely to result in cheaper monthly payments than if you start paying in your 70s.
 
Although health is not a factor that affects your ability to secure an over-50s policy, if you are a smoker then it is likely to cost you more each month. The value of your payout will also depend on how much you can afford to pay each month - the higher your premiums, the bigger the payout you will receive at the end. 

What is different about over-50s life insurance?


No Annoying Restrictions
 
Your insurer should only have to confirm that you are between 50 and 80 years old. Other than that, securing your life insurance should be easy. The biggest advantage of over-50s life insurance is that it is guaranteed. You shouldn’t have to provide any medical history or have any medical checks to be accepted by the provider. There won’t be any uncomfortable questions so the application process should be hassle-free. 
 
Your Monthly Payments Stay the Same Throughout
 
The monthly premium you pay each month will be fixed throughout your policy. It is important for you to be able to plan for the future for you and your family and budgeting is an essential part of this. Having a set amount to pay each month can make it easier to keep up with payments and keep account of all your spending. 
 
Evaluate your financial situation. Work out how much you are able to spend per month and then compare life insurance policies to figure out which one will suit you the best. 
 
Potentially Free Cover when You Reach 90
 
Although starting to pay premiums in your 50s seems early, most insurance providers will offer you free cover once you have reached 90. If you have been with that insurer for long enough then your policy will continue after 90 but you will no longer have to pay premiums. This is a huge advantage because getting new life insurance past the age of 90 would be very expensive and difficult to secure. If this is something that is important to you, check that your insurer offers this before making a decision. 
 
It’s for Life 
 
Unlike a term life insurance, over-50s policies will last until you die so the payout is guaranteed. It is unlikely you will receive the full payout if you have been paying premiums for less than 1-2 years but after this point, you can expect the full payout.
 
If you die in this deferred period, usually around 1-2 years after the start of your policy, the amount you receive as a payout will vary. It will usually depend on how much you have already paid in premiums. If you are worried that this will not be enough then check the details of the deferred period for different insurance providers and compare them to see which one offers the best payout option.

Are there any limitations of over-50s insurance?

You will decide on the fixed payout amount before your policy starts. The payout amount probably won’t be as much as a standard life insurance policy because the risk of payout is so much greater to the provider. You know exactly how much you are getting so you can plan what to do with it, but you may be offered less than you need or want.
 
Missing your monthly premium payments can have big consequences. If you miss a payment, then your provider will no longer cover you and you will be left with no life insurance. The money that you have already paid towards it will also be lost. 
 
The payout does not increase with inflation, so your payout can be less valuable by the time you receive it. However, there are solutions to this. Some insurers offer increasing insurance for 50 to 80-year-olds. The premiums and payout value will increase each year alongside the rise in inflation which means that your payout will keep its value for your whole policy. Bear in mind that you have to be absolutely sure about being able to meet the increasing payment each month as your policy is likely to be cancelled if you miss the payment.
 
If you take out your over-50s life insurance early and start paying premiums in your 50s then it is possible that you will end up paying in more than you receive from your final payout. Your monthly premium can be anywhere between £10 and £50 so if you’re paying this until you’re 80 then it is likely that you will receive a similar or lesser amount than the money you have put in.
Fergus Cole

Author: Fergus Cole

Fergus is a journalist specialising in the personal finance, energy and broadband sectors. He also has a passion for travel and adventure so tries to make the most of this in any spare time he gets.