Over 50s life assurance plans
You have probably seen advertisements for life assurance plans that are specifically designed for those over 50. Over 50s life assurance is a type of whole-of-life assurance. The main difference between these policies and the types of plans described above is that there is no health underwriting with this type. You will not need to undergo a medical examination, or answer any questions about your health. There will however be a few lifestyle questions that might affect the cost of your premiums.
Smokers can however expect to pay higher premiums than non-smokers.
Provided you are aged between 50 and the policy’s maximum age for acceptance (usually between 75 and 85) you are guaranteed to be accepted.
Premiums will be payable for the rest of your life, or in the case of some plans, to a set maximum age, such as 85 or 90.
If you miss even one payment, your cover may end, and you won’t receive any form of cash sum, so you need to be disciplined enough to keep paying every month, perhaps for as long as 40 years or more.
The main disadvantage of this type of insurance is that the plan will only pay out as long as you survive a set period of time at the beginning of the policy, usually one or two years after taking it out. The insurance provider may refund the premiums paid if you die within this period.
The only way your loved ones might receive the full amount if you died within two years is if you die in an accident, and even then, not all insurance providers offer this.
There is also the risk of you paying more in premiums than the amount that will be paid out on death. This is especially likely to be the case if you live to an advanced age.
However, dedicated over 50s plans can be the most cost effective option if you think an application for another type of life insurance would be refused, or would be offered at an increased premium.