get over 50s life insurance

Should I get Over 50s Life Insurance?

22nd May 2015

Over 50s plans offer people over the age of 50 the chance to have life cover without the worry of a potentially intrusive medical questionnaire. If they have been declined life insurance in the past on health grounds, then an Over 50s Plan could provide some life cover.

Many take out Over 50s Life cover to give themselves additional peace of mind; they won’t need to worry about funeral costs or other outstanding bills, which can worry the family at an already difficult time. An Over 50s Plan can therefore help with the cost of the funeral at a stressful time.

Over 50s Plans premiums are guaranteed and will not rise. The plans offer a cash lump sum which is fixed at the outset, but since the sum assured is set when the plan is taken out the value may be eroded over time due to inflation. As you can imagine, a £5,000 pay-out in 2030 will be worth less than a £5,000 pay-out today.

It is important to remember that if you stop paying the premiums, the cover will finish too.  It is important to remember that life insurance is not a savings plan.  The plans do not have a cash value, so there will be no way of getting back the premiums that have already been paid.

The premiums will also be paid for the rest of your life or until a certain age; with the Shepherds Friendly Over 50s Plan, this is until the age of 90, so you may pay more in to the plan than the guaranteed sum assured. The longer you live, the more premiums you will pay.

Pros

  • If you want to leave a cash sum to your family, or to help towards outstanding bills or funeral costs, an Over 50s Plan may be of benefit to you.
  • Your premiums and sum assured are fixed at the beginning of the plan.
  • You are guaranteed acceptance, with no health questions asked or medical examinations.

Cons

  • If you die in the first two years of the plan, you may not get a full pay-out.
  • You could pay more in than is paid out on death.
  • The monthly premium for healthy individuals may be higher than other types of life insurance due to guaranteed acceptance terms.The cash sum is fixed, so inflation will affect the value of sum assured over time.
  • There is no investment element, so if the plan is cancelled, there is no surrender value.