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Life insurance for the over 50s

Over 50s life insuranceGetting married, starting a family and buying a home: these are some of the common reasons why people take out life insurance.

But that doesn’t mean that setting up this type of cover isn't appropriate later in life.

In fact, if you've already turned 50 but don't have a policy, there are a number of benefits that life insurance has to offer.

Why take out life cover?

Younger people are often encouraged to sign up for life insurance to ensure that their families — and anyone who relies on their incomes — do not suffer financially in the event of their death.

Life events such as getting a mortgage or having children are among the most commonly mentioned grounds for taking out a life policy.

But even if you've turned 50, it doesn't necessarily follow that your family no longer relies on your income in some way.

It may be a while since you took out your mortgage, but if your husband or wife was forced to keep paying it off on their own, it could be a struggle.

Equally, your children may be in their teens or even young adults, but that does not mean you no longer feel responsible for them financially to some extent.

If you are the main breadwinner, there is also the possibility that your other half is relying on the ongoing pension contributions from your income to help pay for their retirement.

Planning your inheritance

A further reason why the over 50s may be considering life insurance is to guarantee an inheritance for their family. This is becoming increasingly important as more and more older people are compelled to use the equity in their homes — one of the assets most commonly passed on to surviving relatives — to help boost their retirement incomes or to cover care-home costs later in life.

A life insurance payout can also help your family meet any inheritance tax bill that could be liable on your death, without them being forced to sell the main residence to raise the necessary cash, for example.

Your life policy options

Many life policies are taken out to cover a specific time period — say, while children are growing up, or to match the term of a mortgage.

These types of cover are known as term insurance. Once the term has expired, the policy ends.

But for those who have passed their 50th birthdays and who are keen to take out a policy that will contribute to the inheritance they leave, a different type of insurance — whole-of-life cover — is likely to be more appropriate.

Given the potential benefits of life insurance for the over 50s, it is no surprise that an increasing number of companies are now tailoring whole-of-life policies specifically to this age group.

And this competition means that cheap life insurance is easier to find.

These policies tend to be aimed at those aged between 50 and 80 or 85. There is often no medical examination needed before you are accepted, although there is often a “qualifying period” of a year, say, which means the policy will not pay out the full sum insured if you die within 12 months of it being set up.

The monthly premium you are charged is normally guaranteed not to change, but bear in mind that the lump sum payable on your death is also fixed, and could fall in value as a result of ongoing inflation.

Over-50s policies may also include help with funeral costs.

Find out how to cut your family's tax bill.

Find out more about life insurance