Over 60 life insurance policies are whole of life policies. That is to say, they pay out whenever you die – potentially many years from now – as long as your monthly premiums are up to date.
They might offer an ideal solution for:
- providing a cash lump sum to pay for – or help pay for – your eventual funeral costs;
- ensuring that some or all of your debts may be paid off when you die;
- helping those to whom you might leave your estate to manage inheritance tax liabilities; or
- simply leaving your loved ones the legacy of a cash lump sum by way of a gift.
An initial glance at the market might confirm that there are many different over 60 life insurance plans advertised.
So how do you select the one that might be suitable for you? And what is likely to go into an over 60 life insurance comparison?
The following features are typical of this kind of life insurance, so when making your comparison you might want to make sure that all are offered by the plan you choose:
- fixed price premiums – this may help you to budget, since the premium you pay costs the same each month;
- a guaranteed – generally lump sum – cash benefit paid to your designated beneficiaries upon your death;
- your ability, therefore, either to choose the amount of premium you are able to afford to pay each month or the final cash benefit that is paid in settlement; and
- guaranteed acceptance of your proposal for life cover, without the need for completion of a medical questionnaire or a medical examination – cover is therefore available whatever pre-existing health condition you may have.
Some providers may also offer to match the price of any comparable over 60 life insurance policy which you have been quoted elsewhere.
Whenever comparing over 60 life insurance, there are also a few caveats you might want to keep in mind – whatever provider you ultimately choose, and these warnings are highlighted by the Association of British Insurers (ABI):
- if you die within the first year or so of starting the life cover, you may not receive the full agreed sum, but instead only the value of the premiums you have paid in;
- it is important to remember that you are agreeing to pay the monthly premiums for the rest of your life – or in many cases, until you reach a certain age – and if payments are missed, the whole policy lapses;
- although you are choosing the lump sum settlement now, it is important to remember that this is at today’s prices and that the effects of inflation by the time of your eventual death may considerably reduce the purchasing power of that cash sum; and
- you are going to be paying the monthly premiums for a very long time – quite possibly until your death – with the result that you might end up paying more in premiums than the value of the final settlement.
There are a number of over 60 life insurance plans on the market and before entering into any one contract, it is important to remember that it is a particularly long-term requirement. For that reason alone, you might want to make your comparison of products as careful as possible.