Having adequate life insurance for the protection of your surviving loved ones and dependents is likely to be important for most of us.
Just as important as having the insurance, however, is comparing the very many different products available, weighing up their respective pros and cons, and knowing just what questions to ask about one policy compared to another – particularly so if you are aged fifty plus when your choice may in part be influenced by price and / or your health.
Meaningful and useful comparisons may be fraught with confusing or unfamiliar terms, the difficulty of comparing like with like, and the recognition of what makes one policy better value for money than another.
Comparing life insurance for the over 50s
One of the first choices you are likely to make is about the particular form of life insurance to buy:
Standard level term life insurance
- this is probably the most widely sold form of life insurance;
- it has the advantage of offering affordable cover and a guaranteed pay out if you die within a given number of years – the “term” of the life insurance;
- the disadvantages are that you may need to arrange a further life insurance policy if you survive that initial term and, because you are going to be older, may face more searching questions about your current state of health;
Whole of life insurance
- also called life assurance, this particular form of insurance guarantees a pay out to your designated beneficiary whenever you die – there is no fixed term;
- the advantage, of course, is that provided you continue to pay the premiums, a pay-out is guaranteed whenever you die;
- the biggest disadvantage is the relative expense of whole of life insurance policies, which tend to be used as a longer-term form of financial management and investment;
Over 50 life insurance
- an over 50 life insurance policy is often referred to as a funeral plan as people tend to see them as a vehicle for paying towards their funeral costs when they die;
- the sums insured (i.e the amounts paid out upon death) are typically lower than traditional life insurance policies (sums of £5,000-£10,000 are not uncommon with over 50 life insurance policies), which means that the premiums are lower;
- acceptance in to this type of life insurance plan is typically guaranteed, meaning people with pre-existing medical conditions or those who have been unable to get insured elsewhere, can take out the cover;
- “People who are aged 50plus and seeking insurance, but who have no pre-existing medical illnesses or haven’t been refused insurance elsewhere may find that this type of plan is not the most suitable for them” says Ashley Shepherd from over 50 life insurance comparison site Over50choices.co.uk. He adds that they may get up to four times more cover by investing in a traditional life insurance policy;
Over 50 life insurance comparison
- the principal component of any comparison, of course, is the amount you pay in premiums relative to the benefits payable upon your death;
- the underlying message from the Money Saving Expert, Martin Lewis, for instance, is to make sure you do your maths – essentially, this is a question of calculating the amount you are likely to pay in premiums for your over 50 life cover and comparing it to the pay-out that is guaranteed.
Making the right choice is clearly important but ensuring that you make an informed and considered decision on the 50 life insurance to buy may depend on your using the resources of an expert and experienced comparison website for independent and impartial advice.