Hitting the 50-year marker in life is a remarkable feat and there’s still plenty to look forward to at this age. This is when you can truly start enjoying the financial security and freedom that you’ve worked so hard to create over the years. It’s also a good time to reevaluate your goals for the old age to be sure you’re taking the right retirement path.
What are over-50 life insurance covers?
Put simply, these are policies taken by people aged generally between 50-80 years to pay their family members a certain amount of money upon their death. Unlike traditional life insurance plans, the state of your health doesn’t matter when it comes to getting this cover.
Usually, those who take out over 50s covers do so to assist their family and loved ones with the immediate costs after their passing away. This includes funeral costs and any other financial assistance that can help to cushion the family members soon after passing away.
Benefits of getting over-50 life insurance
The biggest advantage of this type of policy is that, unlike many other life insurance packages, it doesn’t require any medical assessment. You usually need to be aged between 50 and 80 years to qualify for this cover; the current state of your health doesn’t matter.
Also, with an over 50 cover, the sooner you take out the policy, generally the higher the payout will be. Finally, most insurance companies will try to pay accepted claims as quickly as is possible.
Three things to know about over 50s life covers
You could end up paying more than your loved ones will get back
One of the biggest downsides of over-50 life insurance covers/policies is that you can end up paying in more money than what the policy may pay out. Let’s take a look at this example: if someone is paying £20 in monthly premiums for a cover amount of £5,000, they will end up paying more in total premiums if they were to live for an additional 20 years and 11 months.
Consistently paying your premiums is key to enjoying full benefits
Like all other forms of insurance covers, if you stop paying your policy premiums as agreed with your insurance provider, your cover may stop and your dependents may receive nothing.
There’s a waiting period – ask your provider about it to avoid surprises
With this type of insurance there is more often than not a moratorium period. This means that in the event of death, caused by natural causes and within the first 2 years, the full benefit may not be paid out.
What to consider when looking for over 50s insurance
Whether you’re in the market for your first life insurance cover or considering reviewing your existing cover, the following three factors will come in handy:
Type of policy
When shopping for a life insurance policy, there are two main types you can choose from: term, life insurance and whole of life insurance. A term insurance policy expires at the end of a set term. This can be 10 years, 20 years, or even 30 years. On the other hand, whole of life insurance lasts until you die and guarantees that your beneficiaries will get your death benefits as long as you keep paying.
One important thought to keep in mind is to consider how your final expenses and funeral costs will be handled. For many people, having a burial insurance policy to pay for these expenses will be a wise decision. Families can select policies from several well known life insurance providers such as Transamerica, Colonial Penn, and Lincoln Heritage.
It’s important to determine how much death benefit you’d like to purchase before choosing a policy. Do you want a policy that only covers your funeral expenses or are you looking for enough benefits to pay off your mortgage or fund your child’s education? Having a clear goal on this is key to ensure you do not underestimate or overestimate your policy payments.
Like any other service, you want to work with a company that’s easy to work with and responsive whenever you need to seek clarifications. As it is not possible to test the quality of every insurer’s customer service, try going over reviews on comparison websites to see what other users’ experiences have been like with different providers.
Over 50 life insurance covers are a long-term commitment. As such, if you’re looking to take out this kind of package, you need to conduct due diligence beforehand to ensure you’re getting a good deal for you and your loved ones. Articles such as this are a great place to start your research. Finally, we recommend shopping around and comparing quotes before making a final decision.