What is over 50s life insurance?
Over 50s life insurance schemes promise a payout of a fixed lump sum when you die. This is usually given to your family which can then cover their needs, your funeral or any outstanding payments. The money is paid by you in monthly instalments and once the money is paid in, you can’t get it back. It’s like car insurance, only it covers something you definitely know will happen.
Why do some people get over 50s life insurance cover?
- They’ve got children and grandchildren they want to support after their death
- They want to cover their funeral costs
- Other quotes they looked at took into account age and medical history
- They’ve started to think seriously about end-of-life matters
Some people are put off standard whole life insurance as, usually, age and health management are factors in the price. If you’re a 80 year old chain smoker who dabbles in skydiving and punk dancing, you might be looking at a hefty quote.
What should I look out for before I get over 50s life insurance?
When you pay in, it may seem that the fixed sum that will be paid out looks great. If your life was a slot machine, it’d be one of the better ones. Though, each year the lump sum will drop with inflation. It may be the case that the actual payout will be less than you were hoping for.
The small print
Over 50s insurance schemes are payable for life meaning if you live for a long time you could end up paying a lot more than is paid out. So, if you’ve done a bit of yoga recently you may have penalised yourself there.
Life insurance payouts are included in the total worth of your assets used to calculate whether you’re liable for inheritance tax when you die.
When to get over 50s life insurance
If you’re dicing with death at the moment then you’re in the best position to outmanoeuvre life insurance companies. Simply put, if you know you’re going to die sooner than the average age, or if you have a terminal diagnosis, then taking out a plan can work in your favour. Checkmate.
It’s always worth examining the small print of any insurance scheme, particularly ones aimed at the over 50s
It remains to be seen whether over 50s life insurance is something you should be dead set on, but it’s worth understanding the jargon behind such things in order to weigh up whether you’d benefit.