Over 50s Life Insurance vs Investing in Savings
Over 50s life insurance, typically taken out between the ages of 50 and 80, is a policy that’ll pay out a lump sum to your loved ones should you pass away. This lump sum payment could be used to help with outstanding financial commitments, such as a mortgage or funeral costs, but equally, it could be a great way of investing and used as a way of gifting money to loved ones. In this guide, we cover some of the common questions about over 50s life insurance along with comparing the main providers and their policies.
What are the benefits of over 50s life insurance?
The primary benefits of over 50s life insurance, above and beyond the standard benefits of life insurance are:
- Over 50s life insurance offers guaranteed acceptance, meaning you’ll qualify for cover regardless of your health or lifestyle
- A pay-out in the event of your death is guaranteed (you’ll need to have paid into the policy for a minimum of 1-3 years though)
What is the qualification period for over 50s life insurance?
The qualification period, or moratorium, is the period of time directly after taking out the policy which you will need to survive in order for the full lump sum to be paid out. Qualification periods vary from provider to provider but are usually between one to three years. Should you die within that time, your family’s pay-out would be calculated using the amount you’d already paid into the policy.
The amount that would be paid out during the qualification period will vary between insurers, so it’s always best to check the small print before taking out a policy.
Is there guaranteed acceptance for over 50s life insurance?
Yes, one of the primary benefits of over 50s life insurance is that you’re guaranteed to be accepted, you won’t need to take a medical exam or even answer any health-related questions.
Would a savings account be better?
Before we get into the details of which companies and policies are best, it’s important to point out some of the limitations of over 50s life insurance policies. By their nature, over 50s life insurance policies are “whole of life”, meaning you’ll need to continue paying into it until your premium ending age or until you die, whichever is sooner. Premium ending ages vary from insurer to insurer but are typically between 85 and 95 years old and if you miss a payment, your family will get nothing.
The reason we title this section “Would a savings account be better?” is that with every over 50s policy there is a point in time, when you will have paid in more than the cash lump sum that will be paid out. In fact, it’s often the case that you’ll accrue the same payout in the form of savings, quicker than if you were to pay into an over 50s policy. Because of that, it’s vital that you have a calculator to hand when you’re looking at policies so that you can understand whether it might be better to simply save the money, this is especially true if you have very good health.
Top tip: Make sure you have a calculator to hand so that you can weigh up whether a savings account might be better.
Comparing the leading providers of Over 50s Life Insurance
SunLife are the market leader in over 50s policies but that doesn’t mean they’re the best when it comes to costs and terms. All of the policies we’ve included in this guide require you to pay a monthly premium, will pay out a lump sum when you die and won’t ask you for a medical if you’re between the age of 50 and 85.
The best life insurance company for you will depend on your circumstances and how much you’d like to pay into the policy, so we’d always recommend using comparison tools or speaking to an independent broker such as myTribe Insurance to get advice before you buy.
UK Providers of Over 50s Life Insurance
Post Office
An established British name. Over 50s Life Insurance from Post Office offers guaranteed acceptance for UK residents aged 50-80 and can provide a useful lump sum for your loved ones when you die.
Policy key facts
Term: Whole of life
Premium ending age: 90
Waiting period: 12 months (capped at £5,000; 24 months for sums over £5,000). 150% of premiums returned in the first year. T&Cs apply, see website^ for details.
More information: Post Office Over 50s Life Insurance
Shepherds Friendly
With over 66,000 members in the UK, Shepherds Friendly Society was originally established in Yorkshire in the early 19th century.
Policy key facts:
Term: Whole of life
Premium ending age: 90
Waiting period: 24 months
More information: Shepherds Friendly website
Legal and General
London-based Legal and General are specialists in investments, retirement planning, life cover and general insurance.
Policy key facts:
Term: Whole of life
Premium ending age: 90
Waiting period: 12 Months (premiums returned)
More Information: Legal and General website
SunLife
The market-leading provider of over 50s life insurance and part of the Axa Group of companies, SunLife has over 800,000 UK customers.
Policy key facts:
Term: Whole of life
Premium ending age: 90
Waiting period: 12 Months (premiums returned)
More Information: SunLife website
Royal London
With over 150 years of experience protecting families, Royal London will let you leave up to £10,000 behind for your loved ones when you die.
Policy key facts:
Term: Whole of life
Premium ending age: 90
Waiting period: 12 Months (premiums returned)
More Information: Royal London website
Assurity (via Assured Futures)
Assured Futures is a specialist health and life insurance provider who have created the product Assurity for over 50s.
Policy key facts:
Term: Whole of life
Premium ending age: 90
Waiting period: 36 Months
More Information: Assured Futures website
National Friendly
Formed in 1868, National Friendly has over 32,000 members with their head office located in Bristol.
Term: Whole of life
Premium ending age: 95
Waiting period: 24 Months
More Information: National Friendly website
National Assurance
Health, income and payment protection insurance from this company that’s been established for over 60 years.
Term: Whole of life
Premium ending age: 85
Waiting period: 24 Months
More Information: National Assurance website
Is there anything else I need to know before I buy?
Because over 50s life insurance is a later life policy different insurers will have different terms relating to what they will and won’t pay out for, so be sure to check the small print before you buy.
Who is an over 50s plan best for?
As it requires no medical disclosure and is guaranteed acceptance, an over 50s life insurance plan is best for those that have an underlying health condition or recent diagnosis – taking out one of these policies can be lucrative and provide your family with a lump sum which is greater than the amount you paid in. Conversely, the longer you live, the poorer value for money these policies will provide.
Remember, above all it is important to consult a registered financial advisor when contemplating big money decisions. Read more on SavvyDad.co.uk about the cheapest car insurance for young people, Critical illness insurance cover, and the best home insurance cover.
Looking for a broker? Reassured is an award-winning FCA regulated life insurance broker, with over 41,000 ‘Excellent’ Trustpilot reviews. They are the UK’s largest life insurance broker having sold over 750,000 policies since forming in 2010. Their no-obligation price comparison service is completely free to use – why not let them do the hard work and identify your best available quotes?
