I’m 52 and decided I needed to get some life insurance to cover the rest of the mortgage and pay for my family if I died early.
I’ve looked around and seen a lot of products that are over the age of 50’s. Is there anything that makes this type of life insurance better for someone over 50 or can I get any life insurance.
We have about £50,000 left on our mortgage which will be paid off in the next 6 years and I would like the insurance to cover that and also pay some money if I died at any age before the age of 65.
People over 50 can be bombarded with life insurance products advertised on TV and letter box fliers, but can they get any policy?
Angelique Rosica says of This Is Money: With less time left on the mortgage, some people may feel like taking a chance and eliminating the need for life coverage, so it’s good that you still consider this an important product.
You can get any policy, but there are also a lot of products that are over 50 years old on the market. They can be useful in some cases, but they can be very expensive and may not cover what you need.
Here, two experts explore potential options for people in your position.
David Vickery, Cavendish Online Insurance Adviser says: While one obvious difference between over-50s policies and traditional life insurance is that over-50 plans target those over 50, the other big difference is that over-50 plans don’t ask any medical application questions, so They’re a great option if you have health conditions or are struggling to get whole life insurance.
You are basically guaranteed to be accepted by the insurance company if you are in the appropriate age group. This is one of the big selling points of over-50s coverage.
David Vickery of Cavendish Online says the downside is that 1950s-plus products are more expensive than traditional ones.
The downside to this approach, though, is that often, over-50 plans are more expensive than traditional life insurance for healthy people.
Therefore, if you are a healthy 52-year-old, you may find that a term insurance policy can work better in terms of protecting your mortgage.
This is especially true given that over 50 policies can be quite restrictive as the maximum cover amount is often capped at £25,000.
Therefore, it is unlikely that you will be able to obtain the required level of cover of £50,000 for mortgage protection with a 50+ year policy.
It’s also worth knowing that these policies often come with a period of exclusion.
So, if you die in the first year or two, you won’t receive full payments, and instead your policy will pay lower interest (usually a multiple of the premiums paid). The exception to this would be if you were to die from an accident.
Based on what you’ve told us, I’d suggest looking at two separate life insurance policies. One based on the diminishing term of the remaining balance of your mortgage over six years, and then a separate insurance policy to cover you for an amount until you reach the age of 65. This would give you a more balanced and appropriate level of coverage.
Ben Burgess, Senior Consultant, LifeSearch, adds: How much coverage does this provide? [over-50s] Policies are usually relatively low, usually a few thousand pounds, although funerals can cost much more.
With traditional coverage, you can choose any amount of coverage according to your budget.
You may end up paying more in the policy than your family will make out of it, especially if you live a very long time. With traditional coverage, this is not the case because the price is identical to the individual, as opposed to everyone paying the same rate.
If the income is more favorable than a lump sum, there is a policy known as Family Income Benefit which pays an annual amount rather than a one-time lump sum for the remaining term of the policy.
Or, if you need a policy to guarantee payment no matter when death occurs, there is a “life” policy, although it will be more expensive because it will definitely pay out, whereas a “term” guarantee pays only if you die before the policy expires .
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