Senior life insurance

Getting life insurance for seniors can be an affordable way to take care of the ones you love most. Life insurance for over 50s is a simple way to help pay for your funeral, leave a gift or pay off outstanding bills when you die.

Read this guide to find out what you need to know.

Getting life insurance for seniors can be an affordable way to take care of the ones you love most. Life insurance for over 50s is a simple way to help pay for your funeral, leave a gift or pay off outstanding bills when you die.

Read this guide to find out what you need to know.

Faith Archer
Insurance expert
12
minute read
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Last Updated 3 NOVEMBER 2022

What’s the difference between regular life insurance and senior life insurance? 

Regular life insurance policies have a maximum age. This varies among insurance providers, but it’s typically between 50 and 80. The older you are when you take out a policy and the more health conditions you have, the more expensive it can be – especially if you want a fixed, lump sum pay-out. Regular life insurance policies usually only run for a set time, for example between five and 30 years. If you survive this term, your beneficiaries won’t get a pay-out when you die.

Senior life insurance, as the name suggests, is specifically designed for those in later life – in their 50s, 60s, 70s and 80s. Rather than expiring after a set term, senior citizen life insurance policies run for the rest of your life, as long as you keep paying the premiums. This means your beneficiaries will get a guaranteed pay-out when you die. And unlike most regular life insurance policies, you won’t need to undergo a medical or answer questions about your health.

These over 50s policies are typically cheaper than regular life insurance policies, but also tend to pay out distinctly smaller sums. The older you are when starting the policy, the smaller the pay-out will be.

Whole of life protection and investment-linked policies also guarantee a pay-out provided you keep up with your premiums, but are expensive. It’s your choice - you can still opt for standard life insurance even though you are over 50 if you prefer it and can afford to keep paying the premiums.

What options are there for life insurance for seniors?

Your options for life insurance as you get older include:

Whole life cover

Whole of life insurance pays out when you die, no matter what your age. You select the pay-out amount at the outset, after which you pay a monthly premium. It’s also known as whole life assurance. Providing you continue to pay your premiums, the policy will deliver the pay-out to your family when you die. But this means it can be expensive.

Over 50s life cover

This type of cover, usually taken out between the ages of 50 and 80, pays out a modest lump sum to your dependents when you die. It can be used to help your family cover financial costs, including unpaid bills and funeral costs. One advantage of an over 50s life cover plan is that you’re guaranteed to be accepted – you won’t need to pass a medical or answer any health-related questions. Your premiums will also stay the same throughout the whole policy.

With many over 50s life insurance policies, you’ll need to keep up the payments every month or your family won’t receive anything, although some policies stop charging once you hit a certain age or have contributed for a set number of years. This does mean that if you live a long life, you could end up forking out far more for the policy than any pay-out after your death.

Life insurance for over 60s

As you move into your 60s, it's likely that dependent children are forging their own lives. You may have also reached the happy stage where your mortgage is paid off – and the matching life insurance policy has ended. So you may want to replace it with something more suitable for your current situation. A policy aimed at older people could be the answer here. But if you still have dependents, you'll need to consider if this would offer adequate financial protection for them. If not, you might want to consider level term or whole of life insurance instead.

Life insurance for over 65s

Many people coming up to 65 are thinking about retirement. This gives you the chance to take an overall look at your finances and your insurance cover. It's worth considering life insurance for over 65s to see what benefits it could offer in terms of your financial situation as you grow older. You'll need to weigh up what you need as a pay-out against the cost of the policy, so it's worth considering all the life insurance options on offer.

One life insurance bonus for senior citizens is that some providers offer health and wellbeing advice that can help you make the most of your well-earned retirement.

Over 70s life insurance

As we age, our health may not quite be what it was when we were younger. The advantage of over 70s life insurance is that it doesn't require any medical health checks. But it's worth considering all your options. It’s also worth knowing that some policies have a cut-off age of 80, so you might find you have less choice the longer you leave it.

Over 80s life insurance

You might have fewer options if you’re taking out a new senior life insurance policy once you've hit your 80th birthday, but there are a few providers who continue to offer policies up to age 85. If you opt for whole of life or level term life insurance, you'll be asked medical questions. But with an over 50s policy you'll be guaranteed acceptance by any provider who accepts over 80s.

Funeral cover

Funerals can be expensive depending on what kind of arrangements are included. By choosing funeral cover, you know you’re potentially making things easier for those you leave behind. There's a big choice of providers offering pre-paid funeral plans, but what's covered can vary a lot. Some plans only cover the funeral director’s bill, while others could include the cost of a wake or a cemetery plot, so do check the small print to be certain about what’s included. By using a prepaid funeral plan, you may be able to lock in some of your funeral costs at today’s prices, rather than leaving your loved ones to pay higher costs after you die.

Make sure you choose cover from a plan provider that's authorised by the Financial Conduct Authority so your money is protected and you get the plan you've paid for.

Level term cover

Level term insurance pays out a fixed lump sum that’s agreed when you take out the cover, if you die during the term of a policy. If you don’t die within the policy term, your family won’t receive a pay-out. This type of policy can be an expensive option if you start it in later life. You'll also need to consider the length of term. If you opt for a shorter term, you might outlive it, but if you choose a long term you might pay more monthly.

Is senior life insurance right for me?

Life insurance for over 50s works slightly differently from other types of life insurance such as level term, so here's a quick summary:

  • You are guaranteed to be accepted for a plan – you won't have to have answer health-related questions or have a medical examination when you apply
  • You must be between 50 and 80 to apply
  • The policy runs for the rest of your life, not just a set number of years
  • You may be able to stop paying your monthly premiums at a set age – say 90 or 95 depending on the provider, but still be covered under the plan
  • The pay-out tends to be lower than other types of life insurance
  • If you keep paying your premium, the benefit is guaranteed to pay out when you die – unless you die during the initial waiting or ‘moratorium’ period, which is usually one-two years.

If you're not sure if this type of life insurance will suit you best, it might be helpful to speak to a financial advisor or get some quotes to help you understand your options. You'll be able to see how much the different types of policy will cost and what cover and pay-outs are available.

Why might I need life insurance for seniors?

You may not need senior life insurance after reaching 65 if you’re sure the estate you’re leaving will secure your family’s financial future, even after any inheritance tax. But if you’re not confident about that, you might want to consider life insurance for the following reasons:

  • Passing on a legacy 
    Life insurance for over-65s could be a way to make sure that when you go, you leave a tidy sum for your family.
  • To cover your funeral costs 
    Many people take out life insurance in later life to pay for their funeral costs. Considering that even the most basic funeral can cost around £4,056** and an average funeral is £8,864**, it’s one way to cover your send-off without financially burdening those you love.
  • Cover for inheritance tax 
    Some people worry that inheritance tax might wipe out part of the legacy they leave to their family. For estates worth more than £325,000, a tax of 40% is applied to the remaining amount, although the threshold before inheritance tax is due rises to £500,000 if your estate is worth less than £2 million and you leave your home to your children or grandchildren in your will.
  • Outstanding mortgage 
    If you take out a mortgage in your 40s or 50s, you might still be paying it off in your 60s or 70s. Senior life insurance could help chip away at the balance or cover some of your mortgage repayments if you die before it's paid off.
  • Other debts after death
    You might have other outstanding debts like a personal loan or bills. The pay-out from a life insurance policy could help pay these off, so more of your estate goes to your loved ones.

**SunLife Cost of Dying report 2022

How does age affect the cost of life insurance?

As you get older, life insurance typically gets more expensive. That’s because as people age, they’re more likely to die, so there’s more likely to be a claim on a policy. Providers pass on this added risk to customers in the form of higher premiums.

There are many other factors that affect the cost of life insurance. Your health, weight and lifestyle – including if you smoke or not – all impact the cost of cover. There are steps you can take, such as quitting smoking or improving your fitness, to reduce the cost of your premiums.

Use our life insurance calculator to find out how much cover you might need.

Is critical illness covered by senior life insurance?

Critical illness cover typically pays out if you’re diagnosed with a serious illness listed in the policy. A critical illness can include a stroke, heart attack or non-terminal cancer. The cover pays out in the form of a lump sum, which will be tax-free if you paid for the policy, rather than your employer.

Critical illness cover can be added to run alongside a life insurance for seniors policy. A combined policy provides just one pay-out– either when you’re diagnosed with one of the conditions listed or when you die – whatever happens first. If you want a pay-out for both, you could also buy critical illness cover as a separate, stand-alone policy.

Many older people worry about Alzheimer’s and other types of dementia. If this is a particular concern for you, make sure you choose a critical illness policy that includes dementia, where you'll receive a pay out if you get a definite dementia diagnosis that can help you pay for any necessary care.

Just be aware that some insurance providers won’t cover pre-existing medical conditions – problems you had before taking out the policy.

Read more about what is and isn’t covered by critical illness insurance. The type of policy that works best for you will depend on your individual circumstances.

Can I take out a senior life insurance policy for my parents?

You can, if you can show that you’d suffer financial loss if they died. For example, if a mortgage (or other debts) would be passed to you or if you’d have to pay the funeral costs. This is called having an ‘insurable interest’. It’s needed if you buy life insurance for someone else. Unsurprisingly, this can be a sensitive topic and you’ll need the full consent of your parents before getting a policy.

Should I place my senior life insurance in trust?

A way to protect your beneficiaries from paying inheritance tax on your life-insurance pay-out is to write your life insurance policy in trust.

If your life insurance policy is in trust, it won’t be considered part of your estate when you die, so it won’t be subject to inheritance tax. It also means your beneficiaries should receive the money sooner, potentially in weeks rather than months, as it won’t need to go through the probate process.

Top tips when taking out senior life insurance

Your reasons for taking out life cover may change in later life, turning to legacies, funeral costs and inheritance tax rather than mortgages and childcare, but it may still be possible to find affordable options:

  1. If you’d like your loved ones to benefit from a life insurance policy after you’ve gone, consider taking one out as soon as possible. Premiums tend to go up as you get older and more ill.
  2. Always be 100% honest and ‘fess up to any pre-existing medical conditions when applying, even if it makes life insurance more expensive. Otherwise, your policy might be invalid, your family might not get any pay-out at all and all the premiums you've paid will be wasted.
  3. Don’t fancy intrusive medical questions? You could opt for an over 50s plan. But if you lead a long life, you could end up paying far more in premiums than any pay-out.
  4. Remember, you don’t have to take out life insurance for seniors to leave a legacy or cover funeral costs. You could squirrel the money away in savings, with the flexibility to use the cash yourself later on if you really need to.
  5. Do consider writing any life insurance policy in trust. Most people don’t own enough to worry about inheritance tax, but a trust can mean your nearest and dearest get the money much quicker, without it being delayed by probate. 
  6. Keep your policy paperwork in a safe place and make sure someone else knows where to find it when you’re no longer around.

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Frequently asked questions

Can I get life insurance over 65 with no medical exam?

Yes, if you opt for an over 50s policy, no medical questions are asked. But there could be a waiting period of up to two years before the policy will pay out.

Can I get joint over 50s life insurance?

No, over 50s life insurance is for individuals, you can't get a joint policy. But each partner in a couple can get their own policy.

Has COVID-19 affected life insurance?

It’s still possible that there may be a few COVID-related questions to answer during the application process if you opt for a whole of life or term life insurance. Coronavirus isn’t one of the standard exclusions for most policies, so you should be covered if you die from the virus. And of course, over 50s life insurance doesn't ask medical questions.

Can I still get senior life insurance with a pre-existing condition?

Yes you can, but it might affect your premiums. If you’re considered a ‘higher risk’, your premiums might be more expensive. That said, most insurance providers will assess applications on a case-by-case basis, so it could depend on the severity of your medical condition. Your provider might not change the premium at all or they might choose to exclude that condition from your cover – in which case your premiums might even fall.

Criteria and exclusions can vary among providers, so it’s a good idea to shop around to see what options are available. It might be worth talking to a life insurance broker to see what's possible if you’re not confident doing it yourself.

What is a moratorium period?

When you take out a life insurance policy, there may be a waiting period before your cover starts, so you can’t just fill in the paperwork on your deathbed. This is the downside to the upside of not being asked any medical questions or having to have a medical examination when you apply.

Depending on the insurance provider, this could be 12 or even 24 months after the start of your policy. This means that if you die during this period, your family may not receive a pay-out.

Can I cash in a senior life insurance policy early?

No you can’t. Your beneficiaries will only receive a pay-out when you die. Senior life insurance policies don’t have any cash-in value. So if you stop paying your premiums, you won’t get the money back and your policy will be worthless, no matter how much you’ve paid in before.

What is the ‘benefit amount’?

The benefit amount is the maximum amount of money your life insurance will pay out when you die. This can vary among insurance providers. You should typically expect to pay higher premiums each month if you want your policy to pay out a larger benefit amount.

How long do I pay for senior life insurance?

It depends how old you are when you take out the policy and the type of cover you buy. Some whole of life insurance providers stop your payments once you hit a specified age or have paid premiums for a set number of years, even though the cover will continue up until you die.

What is the impact of inflation on my pay out?

The cash sum that is paid out on life insurance for seniors is fixed, so inflation will reduce with buying power in the future. You might want to take this into account when deciding on the amount you want to insure for.

Will my senior life insurance policy pay for my funeral costs in full?

Not necessarily. Over 50s life insurance isn't designed to meet the full costs of a funeral – and doesn't guarantee to do so. It simply pays out the fixed sum agreed when you take out your policy and your funeral may cost more than this. A funeral plan is an alternative option, but that also may have maximum limits too.

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