“Whole of life” policies are the second and more expensive type of life insurance available. With this form of life insurance, you generally continue making payments until your death, although there are a few companies that allow you to stop payments at 85 or 90, while coverage remains in effect until you die. The policy is guaranteed to pay out a cash sum upon your death. These policies may be one of several types of whole life insurance, such as “With profits” or “Non-profits”. (Senior Network)
In general, both of these types of life insurance are commonly available to people between 50 and 75. Individuals over 75 may still be able to find coverage, but it will be more difficult and more expensive as a rule.
How can I find Over-50 life insurance?
With this type of life insurance becoming more common, it is easier to find. You may want to check with your current home, health or car insurer to see if they provide this type of coverage. Another option is to consult an Independent Financial Advisor, who can advise you as to the best choice for your situation.
You can also always do some research online as to the best Over-50 life insurance plans. There are several sites that offer Over- 50 life insurance comparisons such as Fair Investment and UK Net Guide. While you can do a lot of the basic research online, you may want to actually purchase insurance through an IFA or agent, who can be sure you understand all the fine print and details.
Are Over-50s life insurance plans confusing?
While they are not necessarily more confusing than any other type of insurance, it is always a good idea to be able to ask questions and be sure you understand everything. One example is the “Guaranteed Acceptance “plans you see advertised frequently. While these plans may indeed provide coverage to everyone, that doesn’t necessarily make them the best choice. In some cases, guaranteed acceptance plans can cost more than twice as much as competitive plans for the same coverage. David Thomson of Best Deal Insurance says “Consumers could easily get more life cover elsewhere. Over-50s plans are a cash cow for the insurers. How else could they afford the giveaways?” (Life Insurance) It is not uncommon for companies promoting life insurance to promise free gifts or discounts to new customers, but who really pays for these gifts?
It is also worth noting that some companies advertised “Guaranteed Acceptance” life insurance plans for seniors quite heavily on TV without revealing all the details of the plans. This caused a number of elderly people to sign up without understanding all the details and subsequently some of them lost their savings as a result. (This Is Money)
So before signing anything, be sure you are aware of all aspects of the life insurance policy you have chosen. Some common questions you might consider asking include:
How much are my monthly premiums? For how long?
Will they ever go up and if so, by how much?
Is there an introductory period with reduced benefits? Some companies do not pay out the full amount if you should die within the first 12-24 months of the policy.
How long is this policy in force? Is it term or whole-life?
If term is it renewable? At what rate?
Will I pay until I die or is there an age where premiums stop?
Is there a point where what I pay in will exceed the value of the policy?
Is this policy written “In Trust”? This is very important as if the policy is written in trust; it goes directly to your heirs tax-free and not into your estate, where it would be subject to taxes.