Money Expert > Life Insurance > Over 60s life insurance
Over 60s life insurance
Last updated: 18/07/2024 | Estimated Reading Time: 6 minutes
Money Expert > Life Insurance > Over 60s life insurance
Last updated: 18/07/2024 | Estimated Reading Time: 6 minutes
Taking out life insurance is something people start to think about as they get older. Whether it’s to take care of family or ensure funeral costs are covered, a good policy can give peace of mind to you and your loved ones.
When you get past 60, you might worry that finding a policy might be impossible. Fortunately, this isn’t the case, with a range of different products and options available to you. To make things easy, we’ve broken down over 60s life insurance, to give you an idea of what’s going to work for you.
As you may have guessed, over 60s life insurance is any life insurance product that is available to someone over the age of 60. There are different types available such as term life, whole of life and guaranteed over 50s plans. Once you have established terms and been accepted, you will pay a monthly premium, and should you pass away, a lump sum will be given to a beneficiary of your choosing.
Over 60s qualify for a guaranteed over 50s plan (anyone who is a UK resident aged between 50 to 85 is eligible). What sets a guaranteed over 50s plan apart from other types of life insurance policies, is that they come with "guaranteed acceptance". This means that no matter your medical history or status you will be accepted for cover.
Many policies will have a minimum payout term, and if you die before that you will not receive a payout but you will have your premiums returned. These are generally between one and two years.
When it comes to life insurance, there’s no one-size-fits-all policy. In fact, there are many different types of plan available, which all work in slightly different ways. The type of policy that works best for people over the age of 60 depends on the policyholder’s specific circumstances and preferences:
This type of policy keeps running you until the end of your life. That means that as long as your continue to pay your premiums, you are covered and will receive a payout when you die. As a payout is almost always guaranteed, the amount you would receive is generally lower than a fixed-term policy. With Whole of life cover, there are different types of cover. Namely, guaranteed over 50s plans or whole of life insurance. Both types of cover will last for the remainder of your life. However, guaranteed over 50s plans do not require medical information and all applicants who are UK residents aged 50 to 85 will be accepted. Whereas whole of life insurance will require medical information during application in order to underwrite the policy.
This type of cover uses medical information and does not offer guaranteed acceptance.
If you only need life insurance for a certain period, then fixed-term cover is probably for you. It protects for a set period that you would agree with your insurer. Once that time is up, you will need to take out a completely new policy which will require further medical underwriting. Fixed term cover only protects you for a certain period for the length of the policy. That means if you die outside of the agreed period, your beneficiaries will not receive a payout. Many will opt for this if they need to ensure that their family are protected up until a certain point, e.g before their children leave home.
Whereas whole of life policies are fairly uniform, fixed-term generally have three different types. However, it's important to note that not all providers offer all three types of fixed term life cover.
Increasing term:
This type of policy increases in both its premiums and payouts as time goes on by certain providers. It’s designed to keep in step with inflation and is best utilised if the money will go towards living expenses. This type of cover is only available through some providers and brokers.
Decreasing policies have premiums that stay the same while the payout decreases. Generally, these are used to mirror certain obligations like mortgages, so you pay relative to the amount you owe.
If you choose a level policy, then your premium and the payout are fixed throughout the term. These are the most straightforward fixed term policies, but may need to be adjusted should your situation change.
Although not technically a type of life insurance policy, funeral plans fulfil a similar role. Where this type of policy is offered by a provider, you lock in a funeral price at the current rate, and when you die, funds are released to pay for the costs.
However, premiums need to be paid over less time than life insurance, generally between one and ten years, so it can be more expensive in the short term. For more info, check out our page comparing funeral plans and over 50s life insurance.
This type of cover is only available through some providers and brokers.
This will depend on your situation, but can vary hugely. When an insurer takes your application, they will boil it down to how much risk there is of your making a claim, and how quickly. Just because you are in your autumn years, doesn’t necessarily mean you have to pay a huge amount, although you will often pay more than someone younger.
If you are in good shape, without any chronic health conditions, you can easily command a good premium. In general, an insurer will look at the following criteria before deciding on a) whether to take you on as a customer and b) how much to charge. This applies apart from if you choose an over 50s policy which guarantees acceptance and doesn’t require medical underwriting. It will also depend on the type of policy and amount of cover wanted.
If you are worried about the financial security of those close to you should you pass, then life insurance can be a great way to alleviate these concerns. Sometimes, a full life term isn’t necessary, and you may decide to opt for something more short-term to address a particular, time-sensitive obligation.
If you're interested to see what type of over 60s policy is going to work for you, then you can take a look at all of the best options with our life insurance comparison tool.