Equity release is a topic which can stimulate particular interest among the older generation as [...]
Over 50s Plans: Pros, Cons, and Things to ConsiderCreated by Arabela in Saving for you
Many insurance companies offer life coverage that is designed specifically for the over 50s, medicine called over 50s plans. These plans are designed to be affordable and accessible, arthritis but do carry some risks.
One of the most important things to keep in mind about over 50s plans is that they are very likely to be a lifelong commitment, buy so it’s important to review the pros and cons before committing to see if this type of life coverage is right for you.
These plans offer people over the age of 50 the unique opportunity to get life coverage without having to worry about the hassle of a medical exam. That means if you’ve been denied life insurance in the past, over 50s plans could be a second lifeline that allows you to receive coverage. Some providers, such as Shepherd’s Friendly, guarantee acceptance to anyone between the ages of 50 to 75.
And why would you need life cover? While you won’t need to worry about the costs of your funeral, it can be added pressure on your loved ones at a time when they are already grieving. Over 50s plans are designed to cover part or all of your funeral expenses, and the amount that you will leave your family is fixed, guaranteed, and will never lower.
With most of these reasonably priced plans, your premiums are guaranteed and will never rise. This clause is incredibly important because you’ll likely be paying your premiums for the rest of your life – so make sure you can afford it.
Keep in mind
Despite the fact that over 50s plans are an affordable way to get some peace of mind about end-of-life plans, there are some important risks to keep in mind before committing. Over 50s plans are offer a cash lump sum to your family, but since this lump sum is fixed, its value may be eroded over time due to inflation. A £3,000 payout in 2050 will be worth less than a £3,000 payout today.
It’s also important to remember that if you ever stop paying your premiums, your cover is ended. There will be no way to get back the cash that you have already paid in if you end your coverage due to non-payment, so be careful to always remain consistent with your premiums.
Consider also that since you will be paying premiums over the rest of your life, it’s possible that your family will get back less than what you paid into the plan if you live for a long time. The longer you live, the more you will have paid in.
Think over the pros and cons of over 50s plans carefully, and perhaps seek independent advice, before deciding if it is right for you.