What is over 50s life insurance?
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What is over 50s cover?
Some companies provide life insurance policies specifically for people over 50 years of age that pay out a lump sum of money to a person of your choosing when you die.
Most of these policies guarantees acceptance even if you have a troubled medical history.
How much can over 50s cover cost?
Well, it depends on how much cover you want and for how long. Generally speaking, the more cover you want, the more expensive the premiums will be.
Age is also a big factor on cost. The older you are the more expensive cover will be.
On top of this most insurers set a limit on premiums, for example, a minimum of £5 and a maximum of £100 per month.
How long do over 50s policies cover you for?
Most over 50s life insurance policies are based on repaying premiums until you die, regardless of how old you are.
One of the biggest problems with over 50s cover is that policies generally stop if you stop paying and you could lose everything you have paid in.
There are, however, policies where premiums stop when you reach a certain age, normally quite a high age, or when you have paid for a set duration, such as 25 years.
Are there any exclusions to cover?
Most insurers will have policy exclusions that will prevent pay-out if you die under certain conditions, for example:
- Within a year of taking out the policy – although sometimes if the cause of death is an accident you may still be covered.
- The cause of death being suicide
- Dying as a result of drug or alcohol abuse
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Should you get an over 50s policy?
As with most things, this will depend on your personal circumstances, but here are the pros and cons to think about:
- Guaranteed acceptance regardless of medical history
- Pay-out amounts are fixed
- Over the short term you will get a pay-out that is a lot more than you pay in.
- Even if you are healthy, you still get the same pay-out as someone who is not
- Most policies do not rise at all, even to cover inflation.
- Over the long term, you may end up paying in more than you get out
What alternatives are there?
- Term life insurance: If you are healthy this type of policy could offer a higher pay-out with less risk that you pay more in premiums than you get back. The main downside is that if you die outside of the term, you get nothing.
- Whole of life insurance: This type of life insurance pays out whenever you die, with no term restrictions. However, it can be difficult to be accepted if you are old or have a poor medical history.
- Funeral plan: This policy will cover the costs of your funeral when you die.
- Savings account: Another alternative is to put your money into a savings account each month so you have a lump sum set aside to give to your family or pay for your funeral when you die.