05 December 2019

How does over 50s insurance differ from other types of life cover?

10 min read

 
Melanie Wright
Melanie Wright

Personal Finance Journalist

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When you turn 50, not only will you be able to celebrate living for half a century, but (admittedly slightly less excitingly), you’ll also be eligible for over 50s life insurance.

When you purchase any kind of life insurance, whether it’s over 50s life insurance or a different kind of policy, you’re effectively buying peace of mind that when you die your loved ones will be provided with a cash lump sum.

This can be put towards anything they want, so it could be used to clear debts, cover living costs, or to pay for your funeral bills. However, over 50s cover has several distinct differences to other kinds of life insurance.

Here’s what you need to know.

 

You don’t need to provide any medical information

You won’t be asked any medical questions when you apply for over 50s life insurance, although there may be certain eligibility criteria you need to meet, such as being a UK resident. As long as you meet these and are aged 50 or over, you’re guaranteed to be accepted regardless of any medical issues you might have, although there is usually a maximum age limit which will vary depending on which provider you go to.

When you apply for other kinds of life insurance, however, you’ll usually have to answer a few questions about your health, and depending on the answers to these questions you could be declined cover.

 

Cover will last your lifetime

When you take out over 50s cover, the policy will last for your lifetime, so you must commit to making payments every month until a specified date, or with some policies, until you die.

If you die a few years after taking out the policy, then your dependents could end up with a lump sum that’s worth far more than you paid in. The longer you live, the greater the chance you could end up paying in more than the lump sum that’s paid out.

Other types of life insurance often last for a set term. For example, many people take out life insurance specifically to cover their mortgage payments if they die, so they’ll take out a policy which lasts for the same length of time as their mortgage. If they die during the plan term, the payout can be used to pay off the mortgage.

There’s also ‘whole of life’ cover, which as the name suggests, will cover you for the whole of your life, so that your dependants will receive a payout regardless of the age at which you die.

It differs from over 50 life insurance in that you will usually be required to do a medical, and the minimum age at which you can take out cover is lower.

 

Your upper age limit when you can apply may be higher than for other types of life cover

With over 50s life insurance, you can usually apply for cover up to the age of 80 or sometimes 85. As the name suggests, you must be aged at least 50 to apply. 

With other types of life insurance, often there is an age limit by which cover must end, so if you apply for cover when you’re 70, the policy may have to finish once you reach the age of 80.

The older you are when you apply, the higher your payments will be.

With over 50s life insurance, all customers, regardless of their age, usually can get some cover from the minimum starting premium, but the older they are the lower the sum assured – the amount payable when they die – will be.

 

You are limited on the amount of cover you can get

You can usually get up to about £15,000 cover from an over 50s policy.

With term or whole-of-life insurance, the amount of cover you can get will depend on the type of policy you choose, and on the monthly premium you can afford. Different providers will offer different maximum limits, but you can often opt for a lump sum of hundreds of thousands of pounds if that’s what you need. 

You can also choose for the level of cover you have to decrease over time. This might be useful if, for example, you want the amount paid out on death to pay off a reducing debt or a mortgage repayment. Some policies offer cover which increases over time, so that any pay-out keeps pace with rising living costs.

Family Income Benefit cover, another type of life cover, also differs from over-50s cover as it pays out a regular monthly income for the remainder of the term of the policy upon death, rather than a lump sum.

 

Remember…

It’s important to weigh up the pros and cons of all the various types of life insurance available before choosing which kind of cover is right for you.

If you’re not sure, you might want to seek expert advice on the different options available to you.

Biography

Melanie Wright is an award-winning freelance financial journalist, who has written about personal finance and consumer issues for the past 22 years. She is a former Deputy Editor of The Daily Telegraph's Your Money section, and wrote the Sunday Mirror’s Money section for more than a decade. She contributes to a wide range of publications and websites, including The Sunday Times, The Daily Telegraph, The Observer and the Radio Times.