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What are Guaranteed Over 50 Insurance Policies?
Those aged over 50 may not need as much life insurance as they did earlier in life. Mortgages and debts may be close to repayment/repaid and children may have left home. But, many people still like to have some life cover in place although this may not be as easy to arrange as before. Guaranteed over 50 life insurance plans may be an option worth considering. What is a Guaranteed Over 50 Life Insurance Policy?
These plans offer basic life insurance benefits to individuals aged over 50. Generally based on a whole of life basis a plan may give individuals the chance to get the lower value insurance they need for this life-stage. If a plan is guaranteed then the issuer commits to accepting any individual that meets their base age criteria. Why do People Use Over 50s Life Insurance Plans?
Although people may not need as much life insurance at this later stage, some may be useful. Typical reasons for taking out this kind of plan include:
* To leave money to family. * To pay for funeral expenses. * To pay for outstanding bills/debts.
The sums insured here are not designed to leave a large legacy. Most plans are set up for smaller amounts (i.e. a few thousand pounds) and few will offer more than £20,000 cover. Why Not Use a Regular Life Policy?
Although it is still possible to take out standard life insurance later in life this can become more difficult and more expensive as people age. Some will develop health problems that are counted as pre existing medical conditions by insurers. Some will reach an age where regular policies will exclude them from applying. Careful comparison may show that a guaranteed plan may also work out cheaper in some cases.
There are a few advantages to using a guaranteed plan. These may include:
* The individual is given a guarantee of acceptance. * Most policies will not ask for a medical and many won’t even ask health questions. * This can be a cheap and quick way of taking out small sum life insurance. * Premiums are fixed and will not increase over time. * Most policies allow a choice of plan payout sums. * Most plans give lifelong cover (as long as premiums are paid). * Some plans offer optional funeral benefits which will add money to the insured sum to go towards expenses. * Accidental death may be given a higher payment than the basic sum insured with some policies.
Before opting for an over 50 plan, however, it may be wise to think about possible disadvantages. What are the Disadvantages of Over 50 Life Policies?
There are some disadvantages to these kinds of plans. These may include:
* Some plans will set upper age limits which may not allow older people to take out the product. * There will often be a time delay (i.e. a year or more) before the insured sum is paid out for death by natural causes (until then only premiums are generally paid out unless death is accidental). * Most funeral options need the policy holder to agree to have their insurance paid direct to the Funeral Director and the sum insured may not cover the whole cost. * No cash is payable if the individual simply decides to stop the policy.
It is important to check out the terms of any over 50 guaranteed plan to make sure it is suitable. Pay close attention to the payment clauses that dictate when the insured sum will be paid and when the payment will simply be based on a return of premiums.
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