When it comes to marketing life insurance, a lot of the focus is on encouraging newlyweds and young families to take out cover against the worst happening.
But even if you are in your 60s, life insurance can still be a very useful type of protection.
Why take out 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.
Events such as getting a mortgage or having children are among the most commonly mentioned grounds for taking out a life policy.
Later in life, when mortgages are nearly paid off and children have grown up and left home, people may start thinking about the legacies they want to leave behind for their families. Here, life cover can have an equally important role to play.
Ensuring surviving relatives receive an inheritance is becoming more and more important as older people are increasingly forced to eat away at the equity locked up in their homes to supplement meagre pensions or help pay for long-term care.
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.
Who relies on your finances?
Inheritance planning is not the only reason the over-60s have for taking out life insurance — just because you have turned 60, it does not necessarily follow that your family no longer relies on your finances at least to some extent.
You and your partner may still be paying off your mortgage, or have other debts; and your children, even if they have grown up and left home, could still end up needing your support during periods of unemployment or full-time education.
A life insurance policy means that these demands can continue to be met if the worst happens.
Your 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 or a mortgage.
These cover types are known as term insurance. The policy ends once the term has expired.
However, whole-of-life cover is likely to be more appropriate for those in their 60s, who are keen to take out a policy that’ll contribute to future inheritance left behind.
In fact, more and more companies are tailoring whole-of-life policies for this specific age group. Plus, cheap life insurance is now much easier to find, on account of this increasing competition.
Whole-of-life policies tend to be targeted at those aged between 50 and 80/85. There’s often no medical exam required before you’re accepted. There is, however, often a ‘qualifying period’ of a year, for example, when it’s set up. This means the policy won’t pay out the full sum insured if you die within this period.
The monthly premium you’re charged is usually guaranteed not to change. However, bear in mind that the lump sum payable when you die is also fixed, and could decrease in value due to inflation.
Policies aimed at over 60s may also include assistance with funeral costs.
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