Do your financial circumstances allow for all your personal financial affairs to be taken care of if you die?
If you are unsure, consider the following:
Are you able to provide for the costs of your funeral or will your loved ones have the financial burden? Will any bills such as credit card balances and personal loans be comfortably paid off by your estate?
If the answer is no, you may wish to consider life insurance cover that provides the peace of mind if you die as your family will have a lump sum payout to pay any outstanding debts. From this article, you will learn out how life insurance for those over 60 works and how it can relate to your situation.
What is over 60 life insurance?
Providers typically offer over 60 life insurance under a more general 50 to 80-year age band. The policy is generally known as life insurance for over 50 plan and intends to provide financial peace of mind for you and loved ones should you die. Financial protection from a small payout is often used to pay funeral costs to relieve the burden from relatives. It can also be useful to settle debts as well as providing a lump sum for gift purposes to a designated beneficiary.
How does life insurance for over 60s work?
As with other types of insurance, over 60 life cover requires the payment of a regular monthly premium under the terms of a policy. Should you die then, beneficiaries of your life policy will receive a financial payout if your death meets the policy definitions.
How does over 50 and 60 life insurance differ to traditional life insurance?
The over 50 life insurance style of policy is available for those aged over 50 but before the age of 80. Once a certain age attains, varying from 85 to 90 years old, most providers maintain full cover but allow a policyholder to stop paying in premiums. The plan effectively becomes a whole of life policy and pays out whenever you die.
Traditional life insurance typically provides policies over a fixed term duration. It is also known as term life insurance and often specifically covers against an outstanding mortgage or other known financial obligations with a defined end-date.
Guaranteed acceptance versus medical screening
Life insurance over 50 style plans adhere to guaranteed acceptance. Adverse medical history or current medical issues are not grounds to be rejected for cover. The consequence of this is the meagre payout associated with this cover. It is unusual for an assured sum of over £20,000.
It is markedly different from paying out hundreds of thousands of pounds under term life insurance where extensive medical screening is a necessity.
Are there any other options for the over 60s?
Term insurance for over 60s is possible. A thorough degree of medical scrutiny is required. Premiums are high due to increased risks compared to cover for a 30 or 40-year old.
As previously mentioned, a reason for considering fixed term insurance would typically be the repayment of a mortgage or equity release loan, making sure that if you die your dependents would inherit an unencumbered property.
It can be a viable type of cover if you have only just turned sixty, do not have severe medical conditions and are fit and healthy. Potentially, it can provide up to 40% more cover than an over 50s style of guaranteed acceptance for a similar premium.
How can Genesage help?
Genesage is an independent life insurance broker with experience providing life insurance quotes for the over sixty age group. As an independent broker, we do not tie to any single provider. We work with an extensive network of insurers which allows us to provide you with the most competitive quote.
As well as being competitive, our policy quotes carefully align with your circumstances. Our professional and experienced team work closely with you to make sure we understand your needs.
Why should I get over 60 life insurance?
The key to considering insurance for over 60s is to first look at your life circumstances. Would your loved ones have to shoulder a financial bill?
The following are all valid reasons to consider over 60s life insurance:
If you pass-away would your family struggle financially to pay for your funeral costs? If the answer is yes, then a financial lump sum left to designated beneficiaries can be used to cover expenses. Some policies can also include an additional funeral benefit option which provides a further small amount to help with costs.
Settle outstanding debts
Do you have outstanding debts that may have to be shouldered by your loved ones should you die? Financial obligations may include personal loans, credit card bills and hire purchase agreements. A lump-sum payout can help provide you with peace of mind knowing if you pass-away your financial affairs will be in order.
Leave money for loved ones
As an over sixty if you have children or grandchildren, your intention may be to leave a financial gift for them should you die. A payout amount from an over sixties policy can have any purpose that a designated beneficiary wishes, such as helping with university fees or the purchase of a car.
You may have a favoured charity or cause that you think merits a donation from your policy when you die.
Employer cover may come to an end
As an over 60 employee, you may be very close to retirement. Part of your work contract may include a death in service benefit. By putting in place an over sixties policy would allow a continuation of coverage in the case of your death.
Over sixties life insurance plans, due to the small size of the assured sum is little cost. Providers will offer life insurance policies from as low as £4 a month, giving the financial peace of mind that comes with a lump sum payout to dependents.
What should the best life insurance for over 60 offer?
Should you have financial difficulties, many insurance providers will allow for the reduction of payments as long as you are paying a minimum amount per month. It ensures that your policy remains valid and in place.
Immediate accidental death cover
Providers of insurance for over 60s will typically cover accidental death in the first year of a policy. It is essential, as other causes of death do not result in a payout within the first year of a plan. They will only be a consideration from year two.
Full insurance cover after one year
A proficient provider should provide a payout after year one when many will only payout for accidental death. Two years is too long a period for all causes of death.
For the 50 to the 80-year old whole of life policy category, a policy must have guaranteed acceptance. It means that there is no medical to undertake as part of the plan. Pre-existing medical conditions will also not be a consideration.
A payout guarantee applies where a payout will occur as long as you have paid at least half of the policy payments. It is calculated as payments from the start of the policy until the policy anniversary date after turning 90. You stop paying at the policy anniversary or when you die, the one that comes sooner.
Cease of Premium Limit
A proficient insurance provider will allow a policyholder to cease making payments after a certain age yet remains covered. The age range is typically from 85 to 90 years old. Be aware of insurers that insist on premium payments until you die whatever your age.
For a competitive life insurance quote that matches your requirements contact Genesage today. Our team of brokers are available to help you with your insurance needs on 0203 150 1349
Further useful information:
- There is no cash value with an over 60s life insurance policy. It only pays out when you die and cannot cash in
- In certain circumstances, it is possible that depending on how long you live; you pay in more than you payout
Over 60s life insurance can provide the financial peace of mind knowing that your financial affairs will be covered when you die. It is crucial to understand why you are taking out a policy and what it intends to include to make an informed decision regarding the best plan for you.
How much is life insurance for a 60-year old?
Insurance for the over 60s can start from as little as £4 a month to provide a small lump sum payout to your dependents should you die. Cost relates to how old you are when you take out a policy and the amount of coverage that you want.
What is the best life insurance for the over 60s?
The best life insurance is one that matches your requirements carefully and adheres to what the best providers offer. It should include guaranteed acceptance and full insurance cover after one year.
How long before a claim to be paid out?
As soon as a claim approves after correct paperwork is signed off, a payment is generated that takes from three to five days to clear onto the designated account.
Can I use an over 60s policy for IHT?
Inheritance tax is only due on estates which are worth more £325,000. It is highly unlikely that a life cover for over 60 style policy will cover a tax bill as it is rare for a lump sum to pay out to exceed £20,000.
Can I take a payment holiday?
Many insurers will offer a payment holiday. Some will offer a payment holiday of up to 6 months and still stay insured. Others will allow you to reduce your monthly payments to a minimum amount while remaining insured.
Am I covered if I die from Coronavirus?
If your death is from COVID 19, you are covered if the first anniversary of the policy has passed, and payments are up to date.
How does age affect life insurance?
The cost of life cover increases as you get older and with a guaranteed acceptance policy, the payout will reduce as you get older.
Can I take out a joint policy?
If you have a partner or spouse who is a UK resident and aged between 50 and 80, they can take out an over 50s and 60s plan. As this style of guaranteed acceptance policy sets up individually, they cannot be in joint names.
Will my premiums ever go up?
For over 60s guaranteed acceptance plans, premiums do not go up at any policy during the duration of the life plan. It does mean that the cash lump sum payout does not keep up with the rate of inflation; however, you also have certainty that the price of the cover will never change.