This guide explains how over 50s life insurance works. It shows why these policies might be poor value and suggests other ways to leave money for loved ones when you die.
What’s in this guide
- What is an over 50s life insurance?
- How does an over 50s insurance work?
- Pros and cons of over 50s life insurance
- When an over 50s life insurance might work
- What’s the difference between over 50s life insurance and regular life insurance?
- Other ways to pay for a funeral
- How do I buy an over 50s life insurance?
- How to make a complaint about your over 50s life insurance
What is an over 50s life insurance?
An over 50s life insurance plan is a type of policy for people usually between the ages of 50 to 85.
You pay a fixed monthly payment – known as ‘premium’ – and the policy guarantees to pay out a cash lump sum - known as a ‘payout’ or ‘sum assured’ - to your beneficiaries (the people you choose to receive the money) when you die.
The money left for your beneficiaries is often used to help contribute towards funeral costs, but it can be spent however they wish.
How does an over 50s insurance work?
- You must be over 50. Remember, the older you are, the more your monthly premium will be for the same payout.
- Guaranteed acceptance. You don’t need to answer any health questions or get a medical check to be accepted for cover.
- You pay a fixed monthly premium for the rest of your life or the age set out in the policy agreement. This means your insurance company can’t increase your premium so the amount you pay each month never changes.
- You’re guaranteed a fixed payout when you die. If you take out a plan, you can choose what payout you would like, which means you know exactly how much it will be. Once an eligible claim is made after you die, most insurance companies pay out the money quickly – around half of them pay within 20 days on average.
Pros and cons of over 50s life insurance
Pros
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You're guaranteed to be accepted with no medical questions asked.
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Your monthly payments stay the same and never go up.
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You're fully covered after one year.
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Most claims are paid within one day.
Cons
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You might pay in more money over time than your family will get back.
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The payout amount stays the same and won't keep up with rising prices.
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You only get money back if someone makes a claim after you die.
Find out more on MoneySavingExpert about the risks of over 50s plansOpens in a new window
When an over 50s life insurance might work
Over 50s life insurance plans might suit you if you're in poor health and don't expect to live long, since there's no medical check required.
If you already have an over 50s life insurance plan and have paid in for a while, it might make sense to keep paying. But think about how much longer you'll be paying compared to what your beneficiaries will actually get.
Even then, it's worth comparing with regular life insurance first.
Tax considerations
Life insurance payouts are not taxed but may be added to the value of your estate and subject to Inheritance Tax.
You can consider putting your policy into a trust to help reduce this, but there are pros and cons to doing this. Many life insurers offer this option when you buy cover.
For detailed guidance on Inheritance Tax including trusts, read our guides:
What’s the difference between over 50s life insurance and regular life insurance?
Compare over 50s life insurance with regular life insurance to see which one works best for you.
| Over 50s life insurance | Regular life insurance |
|---|---|
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To apply, you must be between the ages of 50-85, depending on the policy. |
You’ll need to be age 18 to take out a life insurance policy. The maximum age limits set by life insurance providers vary. |
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You will not be turned down when you apply, regardless of your health. |
Your eligibility, cost of premiums and cash payout is based on your personal circumstances, for example, your lifestyle, medical condition and family history. However, lots of health conditions are accepted and even if you have an existing condition a regular life insurance policy may be cheaper. |
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You can only take out a single policy. |
You can choose a joint policy or a single one. |
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Over 50s life insurance is usually not considered to be good value because if you take out a policy in your 50s and live an average age of 80 or above, you’ll end up paying in much more than you’ll get out. |
The lump sum payout depends on the level of cover you buy. |
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If you keep up with the monthly premiums, it guarantees to pay out a fixed lump sum when you die. |
There are different types of life insurance to suit your needs and budget. Before you decide which one is right for you, read our guide What is life insurance? to understand the options available and how they work. |
Other ways to pay for a funeral
Over 50s life insurance can be an expensive way to plan for your funeral and provide security. Your loved ones might still face unexpected costs when you die.
There are other practical things you can do to help your family after you die, like writing a will and making sure they can access your online accounts. See our guide How to get your finances in order before you die.
Save regularly instead
Put money into a savings account each month.
If you can avoid touching it, you'll build up more money than most over 50s plans provide.
Find out why it’s a good idea to save regularly and the saving options available to you in our guide Getting into the savings habit
Use existing money
Most banks release funds for funeral costs before probate is granted.
If you have a joint account, the joint account holder keeps access to the account after you die.
Find out more in our guide Help paying for a funeral
Check work benefits
Many employers provide death-in-service benefits (often 3-4 times your salary).
Trade unions and professional bodies sometimes offer death benefits too.
Check if your loved one would qualify for bereavement benefits when you die
Your spouse, civil partner or partner may qualify for Bereavement Support Payment if you were to die before you reached State Pension age. This is paid as a lump sum of £2,500 plus 18 monthly payments of £100.
If you have dependent children and claim Child Benefit for them, a lump sum of £3,500 and 18 monthly payments of £350 could be paid.
Your family may also qualify for other Benefits if they will be on a low income. Use our benefits calculator to see what support they might receive.
For details on other help they may qualify for, see our guide Bereavement Support Payment: eligibility, how to claim and how much you'll get
How do I buy an over 50s life insurance?
Shop around and compare quotes from different companies. You can check if the company is authorisedOpens in a new window on the FCA website.
You can get quotes from:
- specialist brokers – see our guide When to use an insurance broker
- comparison sites – see our guide How to find the best deal on your insurance using price comparison sites.
Remember
Keep your paperwork safe and tell your next of kin about your policy.
Before you consider buying a policy, it’s important to check and compare terms and conditions. For example, check how long the waiting period is before they will pay out and whether the policy covers death because of drug or alcohol abuse.
How to make a complaint about your over 50s life insurance
If you have a problem with your over 50s life insurance, you might need to complain if:
- you were given bad advice about taking out the plan
- you weren't told about the risks or drawbacks
- your insurance company won't pay out when they should
- you've had poor customer service.
Remember
You have 14 days to cancel your plan after taking it out if you change your mind. This is called a cooling-off period.
Make a complaint to your insurance company first.
If they don't fix the problem or you're still not satisfied after eight weeks, you can then contact the Financial Ombudsman Service for free.
The ombudsman can look at issues like:
- problems with your policy or payments
- poor customer service
- misleading information when you bought the plan
- unfair treatment when making a claim.
You normally have 6 months from when the insurance company gives you their final response to contact the ombudsman.