A complete guide to over 50s life insurance

A: By the time people reach their 50s, it’s possible that their insurance needs may have changed. While providing for their family might have been their priority before, for someone over 50, funeral costs, or leaving a financial gift for a loved one may take precedence.

Here are some top reasons as to why people choose to take out an over 50s plan:

1. To leave money as a nest egg for loved ones
2. To contribute towards the cost of a funeral
3. To leave money to help settle unpaid household bills
4. To leave a donation for a favourite charity

A: Whether over 50s life insurance is worth buying will depend on your circumstances and your reasons for thinking about buying insurance.

Over 50 plans offer a guaranteed payout without having to answer medical questions. But there can be downsides, for example, if you live long enough you could pay in more than is paid out.

Start by asking yourself these questions.

1. Do you already have money put aside to help pay for your funeral that your family can access quickly? Your family might end up having to pay for the funeral themselves if the funds aren't released in time.
2. If you haven’t already put money aside for your funeral, do you know how much a funeral costs in your area? You might be surprised to hear that the average cost of a funeral is now over £4,000. (We use the costs of both burial and cremation from across the UK to calculate this figure in our Cost of Dying report.)
3. Do you already own a pre-paid funeral plan with a reputable funeral director or insurer? If so then it is worth checking whether it covers any extras you may want at your funeral such as flowers or a wake – an over 50s plan payout could be used to pay for these.

A: The only way to be sure the right person gets your money when you die is to make a will.

Always make sure you use a solicitor or professional will writer. A will is a legal document and needs to be signed and executed correctly to be valid.

If you have an over 50s plan, then you can include details of this in your will. You can add an explanation of how you want the payout from it to be used.

The person making the claim will usually need to:

• Confirm that the death has been registered and the death certificate has been received
• Provide the death certificate entry number and registration district
• Confirm that the death occurred on the UK mainland

Making a claim for an over 50s plan is usually simple but will differ by provider. It’s worth checking what the claims process is for individual providers when comparing life insurance.

A: If you’ve decided over 50s life insurance is right for you, you’ll probably want to compare the plans available.

Most over 50s insurance plans have similar product features, but there are some key differences that will determine what the best plan is for you. Key differences to look out for and compare are:

• Is the insurer a name you know and trust? There are lots of companies selling over 50 plans but there are only a few trusted brands that have stood the test of time. Look for a brand with a good service record, check their reviews on independent review sites such as TrustPilot, Feefo or Fairer Finance.
• Do you need a plan with guaranteed acceptance? Consider how answering medical questions or taking a medical exam might affect your acceptance, premiums, or payout.
• The cash payout for your age and premium will differ by provider.
• Some insurers will offer different rates for smokers and non-smokers. Make sure you check the criteria as it could affect your payout in the future if you answer incorrectly. Always be truthful in your application.
• You will typically have to wait at least one year before your over 50s life insurance will payout the full sum assured on death. Some plans require you to wait two or even three years before they payout.
• Most providers will offer the option of reducing your monthly premiums and some offer an option to stop paying your monthly premiums at a certain age or once you have paid for a certain number of years. Every provider’s offering is slightly different so make sure you check the detailed terms and conditions before you buy.
• Some providers will offer different over 50s life insurance products tailored to different uses. For example, a plan designed to maximise inheritance for your loved ones with a bigger payout.

You might want to find out how quick and easy the claims process is. When you pass away, it could be important that your family get the payout quickly.

Some providers also offer a welcome gift with your plan, to say ‘thank you’ for choosing them. Whilst these can vary in value considerably, always make sure you are choosing a provider that best suits your needs and not for the welcome gift alone.

A: Over 50s life cover is not the only way to help with funeral costs or to settle any unpaid expenses you leave behind. Here’s some of the alternatives you could consider:

• A funeral plan
• Savings
• Public Health Funeral

Funeral plans, a savings pot and over 50s life insurance are all ways to offer financial protection to loved ones. Let’s look at some of the key differences between them.

An insured funeral plan helps specifically with your funeral arrangements when you die.

It will cover the full cost of your chosen funeral services. The payout from a funeral plan must go to the funeral director to pay for your funeral.

There are also trust-based funeral plans, where you pay in advance for your funeral. This can be in one lump sum or in instalments. Trust-based plans will cover the funeral costs agreed with the funeral plan provider.

Setting aside savings is another way to protect your family from funeral costs when you die. But, saving regularly over a long time will require a lot of discipline. Ideally you won’t dip into your funeral savings pot – which can be difficult to resist.

A Public Health Funeral is arranged by a local council as a last resort for someone who has died without any relatives and/or no means to pay for a funeral. It is a no-frills service and you cannot usually make any choices towards what takes place.

A: Term life insurance provides cover for a set number of years (the ‘term’) and pays out if you die during this time.

This type of life insurance is ‘underwritten’ so your eligibility, premium and cash payout are based on your personal circumstances. This can include your lifestyle, and yours and your family's medical conditions and history.

With this type of life insurance, the payout will normally be bigger than for over 50s cover or a funeral plan. However, term insurance only covers you for a set period of time ‘just in case’ the worst should happen. You could live longer than the period of cover and so won’t get a payout (unlike over 50s life insurance where the payout is guaranteed).

Ultimately, only you can decide what’s right for you and your family. Each of these life cover options can give you peace of mind that your family will be looked after when you’re gone.

There a variety of options available and you might want to seek financial advice to see what might be best for you.