An over 50s life insurance plan pays out a fixed lump sum to your loved ones when you die.
It’ll give you peace of mind that they’ll have the money available to cover things like funeral expenses or outstanding debts after you’re gone.
Over 50s life insurance plans work a bit differently to life insurance for younger people:
Yes, you’re guaranteed to be accepted. There are no questions about your lifestyle or health if you’re over 50 and taking out a life insurance plan.
You can still get quotes for ordinary life insurance through us up to the age of 65, but you might find that the monthly payments are pretty high, especially if you’ve had any ill health over the years. The term that you can cover will also be relatively short.
But over 50s life insurance plans will cover you for a term lasting right up until your death and don’t take your medical history into account.
Over 50s life insurance plans guarantee a certain amount of money is paid out to your beneficiaries when you die.
It’ll give you peace of mind that they’ll be able to:
Make sure that the lump sum you choose for the payout will cover what you intend it to and try to allow for the effects of inflation too.
There are no medical checks and you're guaranteed to be accepted, so these plans could be an option for you even if you’ve had poor health.
There are less questions to answer when you take out a plan too, so they’re quicker and more straightforward to arrange than traditional life insurance.
You might want to take out an over 50s policy because you didn't take out traditional life insurance while you were younger and now it's too expensive.
If your children are grown up and your partner doesn’t rely on your income to pay the bills, it’s still worth considering over 50s life insurance to help cover the costs of a funeral or other bills at what will be a difficult time for your family.
That depends on what you want your beneficiaries to use the payout for.
Consider whether anyone relies on you financially, whether you have any outstanding loans or other debts and how much you can afford to spend on premiums each month.
If you want the payout to cover the costs of your funeral and immediate death expenses, try to allow for inflation when you choose a payout amount. If the payout will only just cover a funeral at today's prices, it might not be enough in 10 years' time.
One of the attractions of an over 50s life insurance policy is that monthly payments are usually lower than taking out a normal level-term life insurance policy with a fixed-sum payout.
For example: the average cost of an over 50s life insurance plan for someone in their 60s with £4,000-£5,000 whole-of-life cover is £21.42 a month. The average cost of ordinary life insurance for someone in their 60s with a term of up to 10 years and £100,000-£200,000 of cover is £77.88.
But you can't really compare the two on monthly cost in this way because of how the cover works so differently. It might seem like a lot more cover with level-term life insurance, but if you lived just 10 years beyond taking it out you'd have paid £77.88 a month for no return at all.
On the other hand, it’s possible to pay more into your policy than you’d get in a payout with an over 50s life insurance plan.
For example, if the payout was £3,000, and you paid £30/month for 20 years - equalling £7,200 – your policy would still only pay out £3,000 and you’d be at a loss.
Over 50s plans have a maximum age. Each insurer is different, but usually when you get to between 80 and 90 years old you can stop paying premiums but the policy will still pay out when you die.
The premium is calculated based on your current age and the lump sum paid out by the policy.
When you get a quote, you’ll be asked whether you’re a smoker, but there are no questions about your pastimes, your medical history or your alcohol consumption. You won’t have to go for any health checks.
You’ll choose the lump sum you want the policy to pay out.
Your quotes will tell you how much your monthly payments will cost for the policy to pay out that lump sum. The higher the payout sum, the more your monthly payments will be.
As long as you make the monthly payments, the policy will pay out the fixed lump sum to your loved ones upon your death.
You need to be aware of the restrictions of an over 50s life insurance plan.
Most over 50s life plans have a ‘waiting period’ when you take out the policy, typically of 12-24 months. If you die during the waiting period, the policy lump sum won’t be paid out, but your premiums will be refunded.
Some policies will pay out during that time if your death was the result of an accident.
When the waiting period’s over, the full lump sum will be paid out upon your death, as long as you’ve continued to make your payments.
If you miss a payment, your over 50s life insurance plan can lapse, so you need to keep on paying into it until you reach the maximum payment age. This is typically 85-90 years old.
In many ways, the cover is similar to a whole of life policy, where you get a guaranteed payout when you die. Whole of life policies are usually taken out at a younger age and the payout can be investment linked instead of a fixed sum.
When you get quotes, choose the ‘over 50s life plans’ option
Enter a few personal details, like your name, date of birth and address
Let us know how much you’d like the policy to pay out. For example, you might want to choose a sum that’ll cover your funeral expenses
Finally, you’ll be asked whether you smoke or not
Compare plans, with cover details for each policy
If you find the plan you want, click for more details and go ahead with your purchase
Even if you’re older, an over 50 plan might not be your only or best option:
There's nothing to stop you taking out a regular life insurance policy if you’re under 65, but it can be very expensive to take out when you’re older, especially if you have health issues.
A level term policy is an option. It pays out a fixed lump sum which you agree on when you take out the cover. If you die with the policy is in place, it’s paid out to your beneficiaries.
These are similar to over 50s plans, but the payout only covers the costs associated with a funeral, so they’re not practical if you want to leave a cash sum for your loved ones.
You could set aside the money you would have paid in premiums into a savings account instead. You’ll earn interest on your money and you won’t lose out if you stop making payments.
Just think about how your loved ones will access this cash when you’re gone if you want it to pay immediate costs like your funeral. It’ll be no good for this if they can’t access it before a grant of probate, so check this with your savings provider.
A lot of people will take out another 50s life insurance plan with the intention that it’ll cover their funeral costs, but with most policies there’s nothing to say your beneficiary will have to use the payout for your funeral.
Some policies will let you choose a funeral benefit option so that you have the control of the money going towards paying for your funeral.
This means the sum paid out will go directly to a funeral company instead of being paid to your beneficiaries as cash. As an added benefit, there may be an additional sum ‘top up’ added to your payout, usually of a few hundred pounds.
If you miss a payment , there’s usually a grace period – for example six months – for you to pay back all missed payments. If you do pay it, your policy will restart.
If you don’t pay the missed instalments, your policy will be cancelled. You won’t get back the money you’ve paid in and the policy won’t pay out either.
Because of this, it’s a good idea to pay by direct debit so you don’t accidentally miss payments, for example because you have to go into hospital.
Yes, over 50s policies should cover you for death related to Covid-19, as long as the waiting period at the start of your policy has ended.
You can only get a quote from us for ordinary life insurance up to the age of 65, but over 50s life insurance plans are available up to the age of 80.
Yes, your premiums will be higher as you get older because you’re considered a higher risk. Things like pre-existing conditions will also increase your premiums. Make sure you research your options to get the cover you need.
Only you’ll be able to decide if it's worthwhile continuing paying the premiums for an existing over 50s policy.
If you cancel, you’ll get nothing back from all the payments you've already made. But if you plan to continue paying, double check it’s worthwhile.
If you’ve seen a more attractive over-50s policy than the one you're currently paying into, before switching factor in the initial period when you won’t receive the guaranteed payout.
You need to keep making your monthly payments until either:
Each insurer will specify its own waiting time before the policy can be paid out, but it’s typically 12-24 months.
If you were to pass away during the waiting time, the lump sum wouldn’t be paid out, but the premiums you’d paid so far would be refunded.
Your over 50s life insurance pays out a fixed sum that doesn’t rise with inflation.
Although you can’t predict the effect of inflation, you might want to think about rising costs and allow for this with the lump sum you choose, especially if you want the payout to cover your funeral.
For example, if funerals cost around £4,000 at the moment, you could choose a £5,000 lump sum payout to provide a bit of an inflation buffer.
For comparing quotes online, Gocompare.com introduces customers to Neilson. Which is a trading name of Neilson Financial Services Limited who are authorised and regulated by the Financial Conduct Authority no. 594926. Gocompare.com's relationship with Neilson Financial Services Limited is limited to that of a business partnership, no common ownership or control exist between us.
As of November 2020, there are 10 active life insurance providers on the panel at Nielson.
The average cost of over 50s life insurance plans bought 25 August-23 February from Nielson through Gocompare by people in their 60s with £4,000-£5,000 was £21.42 a month. The average cost of level-term life insurance policies bought 25 August-2 December from Nielson through Gocompare by people in their 60s with £100,000-£200,000 cover was £77.88 a month.