Life insurance for seniors
What is life insurance?
First, let’s explain what life insurance actually is.
A life insurance policy means that if you pass away during the time period of your life insurance, your nominated beneficiaries will receive a lump sum payment called the death benefit. Your insurer will also pay out your policy if you contract a terminal illness with a life expectancy of 12 months or less.
All you need to do to receive this valuable benefit is to keep up with your premium payments while your policy is still active.
People buy life insurance for many reasons, such as:
They want to leave some money for their loved ones when they pass awayCovering funeral costs or inheritance taxMeeting outstanding financial obligations, such as mortgage payments
However, for many, it’s all about the peace of mind that having life insurance brings. It’s a great feeling to know that you’re looking after your loved ones if the worst happens and you pass away.
You can find out about life insurance in more detail in this article from MyTribe Insurance.
How does life insurance for seniors work?
Senior life insurance works slightly differently from traditional life insurance. Here are some of the differences:
No age limit – Regular life insurance policies have maximum age limits, but senior life insurance policies will accept you, even in your 80sNo need for medical examination – Many life insurance companies require you to take a medical assessment before they insure you. Over 50s life cover insurers do not ask for a medical exam. Acceptance is guaranteedNo term – A standard life insurance policy runs for a set period of time, called a term. If you’re still alive at the end of your term, you don’t receive a payout. Senior life cover lasts for the whole of your life with a guaranteed payout for your beneficiariesAffordability – Traditional life insurance can be quite expensive, especially if you want a large amount of cover. Senior cover payouts are more modest, but it means premiums are lower
Types of life insurance
Over-50s life insurance aims to be as simple as possible. Take out your policy, pay your premiums and your beneficiaries receive a payment when you pass away. In the traditional life insurance industry, this is known as whole life cover.
However, there are still a few different types of senior life insurance to choose from.
Level cover
Level cover is the most straightforward type of senior life insurance. The amount your beneficiaries receive remains the same from the first day of your policy until you pass away, as does the amount you pay in premiums.
It’s easier to budget to pay your monthly premiums with level cover. However, the longer that time goes by, the less purchasing power your payout will have due to inflation.
Increasing cover
Increasing cover aims to safeguard your life insurance lump sum against inflation.
Every year, the amount of cover on your life insurance rises (usually by the rate of inflation). The disadvantage is that you pay higher premiums to match.
Funeral cover
Funeral cover is an optional add-on to your senior life insurance policy. It covers your funeral costs when you pass away. However, what is (and isn’t) covered varies between providers, so check the terms and conditions of your policy.
33% cite paying funeral costs as a reason for taking out life insurance – Source
Critical illness cover
Another optional add-on to your senior life insurance policy is critical illness cover.
If you take out this cover and you’re diagnosed with a serious illness (as specified in the terms of your policy), your insurer pays out a portion of your cover amount. Conditions likely to be covered include:
Heart attackCancerStrokeAlzheimer’s diseaseMultiple sclerosis
Advantages of critical illness coverage include replacing your income if you cannot work while you recover. You can also use your payout to subsidise your medical costs if necessary.
However, unlike the life insurance part of your policy, insurers do not cover pre-existing conditions for critical illness cover.
Benefits of life insurance for seniors
No matter what age you are, life insurance delivers many significant benefits, including:
Peace of mindEnabling your loved ones to meet their everyday financial obligationsExclusive add-ons from your insurance company
However, if you’re older in age, there are some more benefits that are exclusive to you.
Guaranteed acceptance
While most conventional life insurance requires you to fill in a medical history questionnaire or even take a medical exam before you are allowed to take out a policy, life insurance for seniors does not insist on this.
If you’re aged between 50 and 80, you’ll be able to get a policy and enjoy the benefits of life insurance.
Guaranteed lump sum
As there is no set term for senior life policies, your life insurance policy runs for your entire life. This means your dependents are guaranteed a payout when you pass away.
Your dependents may use this payout to help meet their financial obligations and cover everyday bills. Alternatively, you could bequeath your life insurance payout as a legacy for your dependent children to maintain or upgrade their lifestyle.
Cover funeral costs
The average cost of a funeral in the UK in 2022 was £4,216 – Source
Funerals are not cheap, so funeral insurance could allow you to get the send-off you’ve always wanted.
It’s important to give your family an opportunity to celebrate your life and say their goodbyes. But is it fair to expect your surviving relatives to pay for your funeral after you pass away? (Especially if you have grand plans)
Be more tax efficient
The great thing about life insurance for seniors is that you can have it ‘written in trust’. This means that when you pass away, it’s not considered part of your estate and not subject to inheritance tax.
It also means it’s not subject to the probate process, so your beneficiaries should receive their payment sooner and with less administration.
But, inheritance tax can be complex and everyone’s individual circumstances are different. Make sure you talk to a financial advisor before you make any decisions on trusts.
Pay outstanding debts
Many homeowners are still paying mortgage payments in their 50s and 60s, especially if they bought a house later in life or took out a mortgage with an extra-long term. If you’re one of those people, have you thought about what would happen if you passed away unexpectedly?
Your over-50s life cover could be your family’s safety net if the worst happens.
As well as the mortgage, your family will have other everyday payments they’ll need to meet even after you’re gone (household bills, council tax, subscriptions). Your life insurance could help cover those payments and provide valuable financial support.
Senior life insurance vs traditional life insurance
While having life insurance is a great idea, whatever your age may be, a traditional increasing, decreasing or level term life insurance policy may be better for you. It all depends on your circumstances. Here are some drawbacks to senior life insurance which may mean a regular life insurance policy may work better:
Waiting period – Many senior policies enforce a waiting period (usually one or two years), meaning it won’t pay out the full death benefit if you pass away during this time. However, if you do pass away during this period, they should return your premium paymentsCover amount – The amount of cover (and the payout your dependents will receive) is typically lower with over-50s policies compared to regular life insurance. This is because of the guaranteed acceptance and whole life aspects of senior coverYou could lose money – If you’re lucky enough to live for many years after taking out your senior life policy, you could end up paying more in premiums than your beneficiaries receive when you pass away
As always, check the terms and conditions of any life insurance policy you buy to make sure you know what you’re getting into. You should also talk to a financial adviser.
Buying life insurance for seniors
The range of options available to you when considering life insurance can be daunting. Here are seven pieces of advice for success:
Get life insurance sooner rather than later. The older you are when you buy it, the more you’ll pay in premiumsThink carefully about how much coverage you need. You want to leave your beneficiaries a decent amount, but the higher the death benefit, the higher the premiums. You may be paying premiums for many years, so make sure you can afford itTalk to your financial adviser about getting your policy written ‘in trust’. It may help you save on inheritance taxIf you’re asked anything about your medical history, be totally honest. Failure to disclose a condition may lead to your claim being refused. Also, if you smoke, you must mention that too.There are alternatives to over 50s life insurance. For example, you may find that a high-interest savings account pays a better return and is more convenientGet a wide range of life insurance quotes from a variety of insurance companies to ensure you get the best dealAfter you’ve bought your policy, be sure to tell your beneficiaries about your life insurance and let them know where to find your policy documents if you pass away
7 best life insurance policies for seniors
Now, let’s look at seven of the most popular life insurance policies for seniors. Each insurer works differently, so use our guide to find the right cover for you.
Aviva
Aviva offers whole life cover for those over 50s, with no need for a medical.
Premiums range from between £5 and £100 per month, depending on the amount of cover you require and your personal circumstances.
Policyholders also get access to the Digicare+ smartphone app, which delivers health-related advice and information straight to their phones.
Key benefits
Claims are usually paid within 3-5 working daysPremium payments end after 30 years or your 90th birthday, but your cover lasts for lifeThe Aviva app supports your everyday wellbeing
Disadvantages
Cover only available between the ages of 50 and 80No joint cover availablePolicy will only pay if you pass away in the first year if it’s an accident
Reviews
Aviva has a 4.4/5 rating on Trustpilot from more than 27,000 reviews.
Not all of these reviews are for life insurance. However, with such an impressive score, we can reasonably believe that Aviva customers are impressed with their services.
Post Office
Seniors can get life cover from the Post Office. Post Office was awarded Best Life Insurance Provider for 2022 at the Your Money Awards. This was the 14th year in a row Post Office has won this award. What an achievement.
Key benefits
Up to £10,000 of cover available depending on age and circumstancesNo medical checksProtected benefit available. This means you can still claim half your cover amount if you stop paying your premiums
Disadvantages
Only accidental death is covered during the first 12 months of the policyFuneral coverage available, but it only offers £250 towards the cost of your funeralMaximum age for premium payments is as high as 95
Reviews
It’s difficult to find customer reviews of the Post Office’s over 50s life insurance. On TrustPilot, there is only one review page for every service it offers, including parcel delivery.
However, when giving out the Best Life Insurance Provider 2022 award, Your Money praised Post Office’s reasonable pricing, sensitive customer service and high-quality products.
Legal & General
Legal & General offers high-quality cover over-50s life insurance, available in minutes.
Customers have access to wellbeing support from day one of their policy, including access to registered nurses over the phone. This feature is also available to the policyholder’s partner and any children living at home.
Key benefits
100% of over 50s life insurance claims paid in fullGuaranteed acceptance with no medical requiredFlexibility to alter your premiums to match your personal circumstances
Disadvantages
If you pass away during the first year of the policy (unless it’s an accident), you’ll only receive your premiums backOnly fixed lump sum coverage available, so its purchasing power will be affected by inflationFuneral benefit is not guaranteed to cover the entire cost of your funeral
Reviews
Legal & General’s life insurance service has a 4.7/5 rating from 159 reviews on Trustpilot.
Customers enjoy their cost-effective insurance products and friendly, professional staff.
SunLife
SunLife promotes itself as the nation’s favourite over-50s insurance company, supporting families for more than 200 years. More people go with SunLife than every other provider combined.
Premiums for over-50s at SunLife start at as little as £3.70 per month. There are also some great add-ons, including gift vouchers when you sign up.
Key benefits
Claims typically paid within just 3 daysUp to £18,000 cover available100% of claims paid out
Disadvantages
Only £250 available as funeral benefitYou’re only fully covered after the first yearNo maximum age for premiums, so you’ll always pay premiums until you pass away
Reviews
SunLife has an excellent score of 4.6/5 on Trustpilot, based on more than 6000 reviews.
Customers appreciate SunLife’s straightforward sign-up process and professional staff.
Many reviewers have also praised SunLife for their compassionate approach when the policyholder’s loved one makes a claim on the life insurance policy. It makes a stressful time that little bit easier.
OneFamily
OneFamily is expert in financial help for the very young (through its Child Trust Funds) and seniors, through over 50s life cover.
From only £10 per month, you can access OneFamily’s top-quality cover. Defaqto’s experts rate OneFamily over 50s life insurance 5/5. OneFamily also won the Best Life Insurance Provider for Over 50s at the What Mortgage awards 2021.
Key benefits
Terminal illness and funeral cover comes as standardLower rates available for non-smokersLarger payout amounts available compared to competitors
Disadvantages
Full life cover is not available until 24 months after taking out the policyPremiums payable until the age of 90Funeral benefit may not cover the whole cost of your funeral
Reviews
On Trustpilot, One Family has an excellent rating of 4.6/5, based on more than 1800 reviews. Not all of these reviews are for life insurance. However, with such an impressive score, we can surmise that One Family customers are generally happy with their services.
British Seniors
As the name suggests, British Seniors is all about looking after senior citizens in the UK. Its over-50s life cover is designed to help with funeral costs, service debts and provide valuable peace of mind.
British Seniors offers life insurance for seniors for as little as £4.32 per month.
Key benefits
Accidental death pays 2X your benefit amount (capped at £20,000)Guaranteed acceptance for any UK resident aged between 50 and 80Award-winning UK-based customer service
Disadvantages
Premiums don’t end until you’re 95You must choose increasing cover if you want to protect your payout from inflationBritish Seniors’ term life insurance offers much larger cover amounts
Reviews
British Seniors has an excellent 4.8/5 rating on Trustpilot, based on more than 4,600 reviews. Customers are very impressed with British Seniors’ friendly, helpful and professional staff.
AIG
AIG offers life insurance for seniors with guaranteed acceptance and no medical questions.
It offers protected benefits, so if your financial priorities change and you need to stop your monthly payments, you’re still insured for a reduced amount. You don’t lose all your money just because you stopped your premium payments.
Key benefits
Protected benefitsAccidental death cover pays 3X your lump sum if you die due to an accident within the first two years of your policyHealth support app available
Disadvantages
The maximum age that smokers can get coverage is 81Only available from partners rather than direct to consumerIf you pass away within the first two years of your policy, you won’t get your full death benefit (excluding accidents)
Reviews
AIG Life only has a 3.1/5 rating on Trustpilot. However, this is based on a small number of reviews. Also, the most recent reviews seem to be positive, so many they’ve ironed out their issues.
