Scottish Friendly’s guide to life insurance for the over 50s. What are your options?

The information provided in this article was accurate at the time of publishing and should be read in the context of the date it was published. Views in this article are those of the author alone and do not necessarily represent the view of Scottish Friendly.

Whether you’re planning to spend time with your family, travel round the world or simply enjoy your retirement in peace and quiet, it’s important to make sure your loved ones are taken care of should the worst happen so you can get on with enjoying life.

If you’re looking ahead, it’s never too early to prepare for a time when you’re no longer around – having a plan in place means the people you care about could be protected financially when you die. It’s a misconception that life insurance has to be expensive or complicated. Many financial organisations offer competitive plans and when you start looking you might find yourself spoilt for choice…

Life Insurance choices…

The market is competitive and there is a great range of products out there. Do you need fixed term assurance – which covers a pre-determined length of time? Or are you looking for ‘whole of life’ cover – which protects you until you die? Do you want the policy to include cover for medical expenses or funeral costs? If you are 50 to 75 years of age, you may want to consider a type of life cover designed specifically for you…

Over 50s Plans: the basics

Lots of companies offer insurance plans designed specifically for the over 50s and if you take the time to browse the market, you should find a policy which offers great cover and value for money. When you’re selecting an over 50s Insurance plan, keep these basics in mind:

  • Eligibility: Over 50s plans involve no medical history check and no awkward questions will be asked to determine eligibility – if you are old enough, you qualify for the plan
  • Premiums: you’ll pay a fixed monthly premium for the duration of the policy. You’ll know exactly how much you need to pay every month. When you reach a certain age (usually around 85) your premiums will cease – but your cover continues in full.
  • Cash Sum: after 2 years payments have been made, when you die the policy pays out a fixed cash sum to your beneficiaries provided you keep up your premiums. Bear in mind, inflation may reduce the value of the eventual pay out. Before 2 years, a return of premiums is paid.

The details…

It’s important to keep various details in mind with any Over 50s plan. Depending on how long you live, you may pay more in premiums than the plan eventually pays out. The pay-out may also be subject to inheritance tax (depending on the size of your estate). Tax treatment depends on individual circumstances and tax law may change in future.

Make sure you’re comfortable with the monthly premiums of your Over 50s plan. The price of premiums varies depending on gender, smoker status and age – men can expect to pay more than women, for example. If you stop paying premiums at any point (before the age cut-off at 85) you’ll lose your cover entirely – there’s no cash-in value in life cover for over 50s.

The Over 50s policy may be an attractive idea and could offer affordable life cover. If you’re concerned about which type of policy may suit you best, it might be worth talking to a financial advisor. An advisor may charge for any advice provided – any costs should be made clear before you meet. Plan ahead now, for peace of mind in the future!

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting Advisers may charge for providing such advice and should confirm any cost beforehand.