People are living longer and longer lives as medical advances make it possible for people to maintain their health. Because of this, over 50s life insurance has become increasingly popular and more available.
This type of life insurance is available to anyone in their 50s, 60s, 70s and even beyond. Insurance companies generally allow people to purchase this type of policy up until their 90th birthday.
Over 50s Life Insurance
Over 50s life insurance provides a financial payout upon the death of the person insured. This type of policy is very similar to regular life insurance plans with the exception of the advanced age of the insured individual. The lump sum payout can be used by the beneficiary to pay for funeral costs, outstanding debts of the insured individual, medical bills or anything else that they deem necessary. There are no restrictions imposed by the life insurance company as to how the lump sum payment must be used. However, there may be some issues for the beneficiary here in the UK with inheritance taxes.
Estates that are valued at more than £325,000 must pay inheritance taxes to Her Majesty’s Revenue and Customs (HMRC). These taxes can amount to 40% of the amount over the threshold value. It is prudent to talk to a life insurance company about trust fund options and their tax implications if the value of the insured person’s estate will be above the threshold value. It is possible to use trust funds to help the beneficiary receive the maximum amount possible by law from the life insurance policy.
Additional Coverage Options
Different insurance companies will have a range of additional products that can be added onto over 50s life insurance policies. These additional add-ons include:
• Total and Permanent Disability Coverage – this policy allows the insured individual to make a claim in the event of becoming unable to work in the same career or in any career at all.
• Critical Illness Coverage – this policy allows the insured individual to make a claim in the event of a diagnosis of a critical illness included in the critical illness policy such as cancer, multiple sclerosis or stroke.
• Waiver of Premium – this policy waives the costs of premiums for the insured individual if they are unable to work for a period of 6 months or more due to illness or disability.
Each insurance company will have a range of different riders that can be added onto over 50s life insurance policies with different specifications. It is best to check with the insurance company of choice for exact details before purchase.
Many insurance companies waive the need for medical exams on over 50s life insurance policies for people up to the age of 65. However, this is not always the case. Also, just because the medical exam has been waived is not a guarantee that every person will be offered coverage. There are often health questionnaires that must be filled out before the insurance company will provide a quote for coverage. Insurance companies need to determine the risk involved with every person to decide how much the premium amounts should be to provide for the lump sum payment at death. The riskier a person is determined to be, the higher the amount of the premiums will be.
The costs associated with over 50s life insurance vary widely from person to person and from policy to policy. However, there are a number of factors that go into determining an individual’s cost for coverage including:
• Amount of coverage purchased – how large the lump sum payment at death is
• Age of the person insured
• Medical history
• Gender – men generally have higher premiums because of their shorter life spans, riskier behaviours and higher likelihood of certain diseases such as heart disease
• Occupation – some occupations are deemed to be “more risky” than others such as fire fighters, construction workers, etc. With over 50s life insurance coverage, past occupations can also come into play.
• Hobbies and interests – some hobbies, such as scuba and rock climbing, can make premium amounts higher
• Smoking status
• General health – such as weight, blood pressure and cholesterol levels
• Pre-existing conditions – these may disqualify people from obtaining coverage at all from certain insurance companies
• Medical records
Generally speaking, the more risky a person is determined to be, the higher their insurance policy premiums will be. Some individuals may be deemed too risky to provide coverage to at all.
How Much Coverage to Get
The general rule of thumb on life insurance is to get 7 times the amount of the yearly salary earned for coverage. However, this average varies wildly depending on individual circumstances. More coverage might be deemed necessary if a person carries a heavy debt load such as credit card debt, mortgage and student loans. Many people interested in over 50s life insurance may not have the same needs for debt coverage that younger people have. Insurance companies can help determine what amount of coverage is most appropriate. It is also a good idea to talk to close family members to see what amount of coverage they are comfortable with.
Joint coverage is available from many companies offering over 50s life insurance. These policies are generally shared between spouses and may be a much more affordable option. However, the lump sum payout may also be much diminished depending on the policy chosen because it is split between two different people and beneficiaries. Once it’s been determined how much coverage should be purchased, a decision about getting joint life insurance can be made more easily. Make sure to read all the details of any life insurance policy before committing to ensure that the details are understood.
Over 50s Life Insurance Quotes
It is now possible to receive a number of quotes for over 50s life insurance online. This means that people can get the information required 24 hours a day, 7 days a week. Fill in our online form for more information about receiving quotes from the leading insurance providers across the UK.
Over 50s life insurance will become even more affordable and popular over time as medical advances increase the world’s average lifespan. Now people of all ages can get the life insurance coverage to make them feel more secure and provided for without breaking their budgets.