How do over 60s life insurance policies work?
No two insurers are the same. Some companies will expect you to fill out a medical questionnaire before taking out life insurance for over 60s. Other companies will accept anybody, as long as they fall within a specified age range. Saga’s Guaranteed Life Insurance for example, accepts anybody who falls between the ages of 50-75 living in the UK. No questions asked!
Typically, as long as you have held the policy for at least a year, your family will receive a cash lump sum when you die. Some insurers offer a fixed amount while others base the payout on how much you have paid into the policy.
Insurers sometimes offer added incentives. For example, VitalityLife currently work alongside Golden Charter to offer a Funeral Benefit Option; this gives your loved ones access to an enormous network of over 3,000 funeral homes. This also allows you to begin arranging in advance, expressing any personal wishes that you or your family may have to your chosen funeral director. Other benefits vary among different insurers but will typically include funeral planning, accident payments, and even age limits (whereby if you hit the limit, you no longer have to pay premiums but will still be covered for life).
While there are no hard and fast rules as to how much cover you may take out, three factors are generally taken into consideration:
- Your age
- Whether or not you smoke
- Your monthly premium
Age is the primary barrier to entry for over 60s life insurance in the UK. As we explained above, you’re unlikely to see over 60s insurance advertised on TV. It’s normally marketed as over 50s life insurance. Many policies can actually be taken out as long as you’re over 50 and some can also be more tailored to people over 60. Again, this depends on the life insurance provider, but it is well worth looking at the various age ranges offered by policies.
As with any over 60s life insurance policy, whether you smoke or not will mean different things to different insurers. Some may not insure smokers at all while others will simply charge a higher premium, or offer a lower cash sum when your policy is claimed against.
Your monthly premium is dependent on the answers you provide in your medical questionnaire (if there is one), how much you wish to pay, and any additional policy benefits that you have opted into. It’s important to take out a policy with a premium that you’re sure that you can afford for the rest of your life as failure to pay could terminate your policy.