MoneyMagpie

Jun 01

Life insurance for over-50s

Reading Time: 2 minutes

It has taken a long time for insurance companies to accept that in many areas the over 50s are a good risk. Take car insurance – go to a comparison site that compares a host of over 50s car insurance.

Another area where the over 50+ are courted by insurers is life assurance cover where premiums per month are apparently cheaper for the over 50s. Strictly speaking I have my doubts about it being a cost effective product.

The idea is that you save anything from £5 a month from 55 years  to 80 or 90 in what is a ‘whole life’ cover policy and you receive a lump sum only when you die. Then your descendants use these sums to pay funeral expenses or whatever else.

Once when interest rates were high, the cost of a whole life policy didn’t look so good. It was debateable whether it was a better use of money to choose a savings account. Now with even Isa only paying 2-3 per cent, this is a poor return, but that situation could change of course when interest rates get back to normal.

Insurance companies have always pushed whole life though it is a relatively expensive form of insurance, but it is useful for those not in the best of health because there are no medicals. The idea is that someone decides they want a fixed lump sum of, say, £20,000 on death for a fixed £72 a month. If they die any time after the first two years they will receive all of the £20,000.

But £72 each month is quite a lot to save. Term insurance (for a fixed amount of time) is much better value provided you are in reasonable health because they ask health questions and may not insure. With term, for a lump sum of £20,000 (to be paid out immediately the policy is set up should a terminal illness or death occur), you’d pay £18 a month, according to InsureMe-on-Line.com, which acts as agents for the insurers.

For all the appeal of term insurance for 50+, if you ask me I’d forget about saving for something from which the saver cannot personally benefit.  Life insurers remind us “life is for living” and how true.  So taking out a whole life policy at the age of 50+ to finance funeral costs is a bit gloomy.  Save for a rainy day by all means and/or enjoy champagne in old age.  As for the funeral  –  many estates can manage to pay the average £3,000 in funeral expenses, or let the adult children pick up the tab, for once.

Insure2Go

WHAT DO YOU THINK?

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Dong Mark
Dong Mark

Having good life insurance must be given priority in present times, as our future is unpredictable. To protect your family from the inauspicious conditions, you must get a dependable coverage from an esteemed company to enjoy your life fearlessly.

Take Care.

over
50s life insurance

Andrew Wilkinson
Andrew Wilkinson

Hi Jasmine, Interesting article. We arrange quite of a lot of life cover for over 50’s probably because we specialise in helping people with pre existing health conditions such as diabetes,heart diesease, raised blood pressure, height and weight issues etc . The significant majority of the cover we arrange for such clients is term assurance and we do sometimes wonder how many people over the age of 50 needlessly pay more than they need to for their cover when they go direct to insurers offering guaranteed over 50’s plans. Also another issue is that these plans dont offer full cover… Read more »

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