don’t require medical questions or exams and everyone is guaranteed to be accepted. However, this type of advertising can be misleading or confusing to many older consumers. There has been a rise in the number of complaints to the Financial Ombudsman Service regarding some of these companies and at least one company was fined by the FSA for not revealing the risks and details of its policies. (This is Money) Over 177,000 of these polices were sold in 2006 and many consumers found that the details of the policies were not made sufficiently clear. Many elderly consumers who wished to leave some money to their families or at least cover their final expenses found the premiums increased substantially over time.

James Salmon of the Daily Mail reported “Unfortunately, many savers did not realize that that after the initial period their premiums would rocket to obscene Life Insurances, leaving them with a stark choice—cough up the extra money or see the value of their life cover slashed.” (Best Deal Insurance)

Are there reputable insurance policies for the elderly?

Yes, there are many well-established and reputable firms that offer Over-50s life insurance plans. However, the consumer needs to be well-informed in shopping for elderly life insurance. In many cases, the company will warn you that the price you pay in premiums may exceed the face value of the policy (or the amount they will pay out on your death).

William Pritchett, CEO of Empire Homecare advises that seniors looking for life insurance should consider their age, health, financial position and preferences before deciding upon a life insurance plan. He recommends that they “Choose a well-informed, seasoned and service-oriented agent or broker to assist your decision-making process…Do not be afraid to ask a lot of questions and even get a second opinion.” (Insurance Owl)


What is the best way to find a good life insurance plan for seniors?

While many experts recommend consulting an Independent Financial Advisor, this may not be feasible for everyone. You may want to ask your bank or consult a senior help network such as Age Concern or Help the Aged.

You may want to check out online advice sites also, such as Motley Fool and Money Made Clear. However, while doing basic research online will probably be helpful, buying online may not.

William Pritchett notes “There are literally hundreds of thousands of insurance agents and brokers advertising on the Internet. Most of them will provide instant online quotes and even applications for the potential insured. I highly discourage a layperson to purchase insurance in this fashion. A little knowledge can be dangerous.” (Insurance Owl)

How can I choose a senior life insurance plan?

First you need to decide what you hope to accomplish through life insurance. Is your goal simply to leave enough money to cover your funeral and other final expenses? Do you have debts that need to be paid off? Do you want to use the life insurance proceeds as a way to leave some money to your children or grandchildren?

Then consider how much money you will need the insurance to pay out. Do you only need a small amount for basic final expenses? The average funeral cost is around ₤2,000-2,500. (BBC News) Or do you want a larger policy to leave to your family? If so, you will need to ensure that the policy is written “In Trust”. This way, it will not go into your estate and will be available for your heirs tax-free. (Money Extra)

Finally, consider what you can afford to pay in life insurance premiums. While many companies advertise policies from as low as ₤5 a month, these are generally small policies designed to cover final expenses. Many companies such as AIG allow you to choose the monthly payment amount you prefer. You can then calculate how much the payout would be. For example, if you were a 50-year old male and chose to pay ₤19.95 per month, the cash payout at your death would be ₤6,272. If you were a 60-year-old female paying ₤12.95 a month, the payout would be ₤2,794. (AIG Life)

Once you know what type of life insurance policy you are looking for, you can consult a financial professional or insurance company to explore your choices further.