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Turning 50 is a milestone and, amid the birthday celebrations, thoughts can turn to planning for the later years of life. If you’re starting to think about life insurance in your fifties, here are some options that might be right for you.
What is life insurance?
Life insurance provides a financial safety net for your family or dependants following your death. They might use the lump sum to pay the rent or mortgage, meet household expenses or fund your funeral. It can also allow your partner or another relative to give up work to care for children still living at home.
There are a number of different types of life cover, with options to suit each stage you reach. These include guaranteed over 50s life insurance and term life cover - read on to find out more!
What is guaranteed over 50s life insurance?
Guaranteed over 50s life insurance is a comprehensive cover for your golden years.
It can be used by your loved ones to pay off the outstanding balance of your mortgage or other bills, pay for your funeral or as an inheritance for your children or grandchildren. It is similar to whole of life insurance, which guarantees a payout and is therefore also known as life assurance.
It is possible to take out guaranteed over 50s cover up to the age of 80 or 85, depending on the policy you choose. It is called ‘guaranteed’ because the policies are available to everyone, regardless of existing health conditions and without the need for a medical.
What are the benefits of guaranteed over 50s life insurance?
Into your 50s and beyond, your lifestyle and needs are probably different to previous stages in your life. You may have already paid off your mortgage or your children might have grown up and flown the nest - leaving you with more spare cash in your pocket! A guaranteed over 50s policy offers a bespoke policy designed to reflect these circumstances.
One of the main advantages of this kind of policy is that it’s suited to people who are not in the best of health. If you have an existing health condition or chronic illness, you might struggle to get cover with some insurers, but with guaranteed over 50s life insurance, you are guaranteed cover without the need for a medical check-up.
Also, the premiums are usually fixed - unlike a reviewable policy - so you know how much is leaving your bank account every month. This can be a real bonus if you’re looking towards retirement and want to keep financial commitments to a minimum.
When might it not be right for me?
Guaranteed over 50s insurance is not right for everyone and, as with all types of cover, it’s essential to do your research and compare life insurance quotes and features before buying any product.
With this kind of insurance, do note that if you miss a payment, you risk voiding the entire policy - even if you’ve paid in for years. Previous premiums won’t be refunded, so you could lose everything you’ve put in.
Also, depending on how long you live for, you might end up paying in more than your loved ones receive following your death. Do your calculations and consider whether another type of policy would better suit your needs.
Many policies have a minimum wait period of between one and two years. This means that, if you die within this timeframe after taking out your policy, your beneficiaries won’t receive a payout or get back the premiums you’ve already paid.
What is term life insurance?
Term life assurance is designed to give you cover for a defined number of years. If you die within this term, your family or loved ones will receive the agreed payout. If, however, you survive beyond this period, no payout will be made and your premiums will not be returned to you.
Term life insurance is available either as level term life insurance or decreasing term life insurance.
What are the benefits of term life insurance?
Due to the range of term insurance, it’s easy to find a policy to suit your needs, with a number of benefits depending on your circumstances.
With a level term policy, the agreed payout stays the same throughout, regardless of whether you pass away in the second or 22nd year of the policy. This gives your partner, children or other beneficiaries peace of mind that certain expenses will be met in the event of your death.
With decreasing term life insurance, the payout reduces over time, taking into account, for example, the decreasing balance of a repayment mortgage. Decreasing term premiums tend to be cheaper than level term life insurance, offering you an option tailored to your budget and reflecting reduced outgoings as your lifestyle evolves.
Which life insurance is right for me?
Whether you’re just stepping over the threshold into your 50s or sailing through your seventh or eighth decade, the best life cover for you depends on a number of factors. We can help you find the right insurance for your budget and needs - find out more with our range of life insurance guides.
Did you know that writing your life insurance in trust can save money for your beneficiaries? When you pass away, your estate - the assets you leave behind - can be subject to a number of costs, but writing your life cover in trust can prevent these charges, as well as avoid disputes over your final wishes.