These are very strange and challenging times, both here in the UK and around the world.
The global Covid-19 pandemic has for many made life feel much more fragile and this has resulted in a significant increase in life insurance applications.
This vulnerability is particularly prevalent in the over 50s demographic, who are more prone to the virus.
Life insurance offers financial protection for your loved ones should anything ever happen to you. It’s a safety net for a worst-case scenario and cover starts from 20p-a-day.
Below, FCA regulated life insurance broker Reassured define their top 5 tips to help seniors considering taking out cover;
What you can expect in this article:
1. Free welcome gifts
Most insurers will encourage you to take out a policy directly from them by offering a free welcome gift incentive.
The gift normally takes the form of an Amazon, M&S or Argos gift card (£50 – £100), and you will usually receive the gift after paying your 6th monthly premium.
Whilst everyone loves a free gift, its’ monetary value is fairly insignificant compared to combined monthly premiums you will pay over the entire term of the policy.
The most important thing is to make sure you secure the right policy, at the best price. Think longer term and try not to be swayed by the free gift.
2. Live a healthy lifestyle
Life insurance providers calculate the cost of your premium largely based on the level of risk you pose. The greater the risk/increased likelihood of a claim, the higher your premium.
However, living a healthy lifestyle can help you save a significant amount of money on your life cover.
Insurers pay particular attention to your weight/BMI, smoking status, alcohol consumption and medical history.
In many parts of the UK there has been a significant increase in peoples alcohol consumption since the pandemic broke.
It is important to state that you should never lie or withhold information about your health or lifestyle on your application in order to secure cheaper premiums. This is known as non-disclosure and can invalidate your policy, rendering your selfless investment a waste of money.
3. Are over 50 plans the best option?
Many people aged 50 or above choose to take out an over 50s plans.
But is this the best policy option?
The main advantage of an over 50s plan is that you are guaranteed acceptance if aged between 50 – 85, without the need to answer any medical questions.
Reassured have prepare this helpful guide on no medical insurance if you require more information.
What’s more, a payout is guaranteed as long as you keep up with your premium payments.
If you suffer from a pre-existing medical condition, this can be a great option as it will not affect your ability to secure cover.
The main drawback of an over 50s plan is that it will only offer a cover amount of up to £25,000, whereas term-based cover you are able to secure up to £1,000,000. Payouts are often used to cover rising funeral costs.
Also, the premiums are relatively expensive in relation to the cover amount.
Another option is whole of life insurance, which also guarantees a payout.
However, unlike an over 50s plan, you will be asked medical questions during the application process.
With whole of life insurance, you can secure a much larger cover amount, up to £1,000,000. So, if you are over 50 and in good health this could be a good option.
4. Length of term and cover amount
The greater the cover amount and the longer the policy term, the higher your monthly premiums will be. This is because the risk to the insurer increases.
As a result, its vital to take some time to establish how much cover you require and how long you need it for.
Generally, policyholders ensure they are able to cover their mortgage and future living costs through their policy.
The term length is usually set to protect your family until the mortgage is cleared and/or until the children are financially independent.
5. Compare quotes, save money!
You may be surprised to learn that the cost of life insurance can vary wildly between different insurers.
Each insurer will have a different underwriting criteria and will view your personal situation differently.
That is why it is important to compare multiple quotes, in order to save you money.
A good way to compare quotes is to use a comparison website, however they will not show you quotes from all providers in the marketplace.
Another good option is to use an FCA regulated broker, who can compare quotes on your behalf, saving you time.
Most brokers do not even charge a fee for their services, (they earn a commission from the insurer).
Lastly, you can source quotes online or over the phone yourself, to identify the perfect cover – whilst this is time-consuming it is the most full-proof way of comparing the whole market.
Unfortunately, people often only consider life insurance when they need it and by then it is too late. So, it is important to seize the day, be proactive and secure the financial future of your loved ones’.
We hope you have found this article helpful.
