It is a well known fact that people are living longer than ever before. Many insurance companies have recognised this and have policies that are specifically targeted at people over the age of 50. There are plenty of advertisements on TV, in newspapers and magazines that specifically offer Life Assurance for the over 50s.
This article explains the options available for Life Insurance or Life Assurance for the over 50s and specifically looks at those policies frequently advertised.
Life Assurance options for the over 50s
Most Insurance companies will offer Term Insurance to people over the age of 50. The cost of premiums will be higher than for someone in their 30s, but the need for Life Insurance will still be there, especially if the major contributor to the household income is still working.
Frequently the amount of Life Insurance needed will be lower in later years as it is likely that children will no longer be financially dependent and in many households the mortgage will have been substantially (or fully) repaid.
If insurance is required for a fixed term, then the cheapest Life Assurance will be a Term Insurance policy. However, should there be a need for long term insurance then a whole of life policy may be appropriate. There is a whole separate page giving more information about whole of life assurance.
The Life Assurance advertised for over 50s
The many advertisements for Life Assurance for the over 50s frequently state that they offer guaranteed acceptance, a fixed sum payable at death (whenever it may be) and what appear to be relatively low premiums that are payable until death (or in some policies age 90).
The policies that offer guaranteed acceptance will insure people who are fit and healthy at the same cost as those who have serious medical conditions. Therefore the actual cost of these premiums will be higher than those of a similar policy where the health has been assessed (known as being underwritten) when an Insurance company agrees to take on a whole of life Assurance policy.
The difference in costs between a guaranteed and underwritten insurance can make a substantial difference to the amount of cover available for a fixed premium:-
For a person age 60, the amount of cover available for £15.00 per month will be around £3,000.
For a person age 60, the amount of cover available for £15.00 per month will be around £5,000.
It should be noted that many guaranteed acceptance policies will not pay the amount covered in the first two years of the policy, just return the premiums paid. Alternatively they may not pay out the cover in the event of death from a pre existing medical condition in the first few (up to 5) years of a policy.
A fully underwritten policy will pay in the event of death irrespective of cause (assuming your medical history has been properly disclosed).
This article is for guidance only and must not be construed as advice. The contents of this article are aimed at the UK market, although many countries will have similar policies available. If you need advice you should refer to a Financial Adviser.