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Life insurance for over 50s

Over 50s life insurance is a life insurance category for people who are 50 and older. Over 50s life insurance is very useful because the payments after the death of the insured person help relatives and family member to repay mortgage and ensure financial protection for children who are still not financially independent. What is more, some over 50s life insurance contracts include compensation for the funereal costs. However, if the insured person is planning to leave his house and other valuable property to his beloved he has to remember that there is 40 % tax on bequeathed assets above certain threshold. The money from the insurance company can be used to cover these taxes and prevent relatives from selling part of their inheritance.

Premiums of Over 50s Life Insurance

Premiums paid for over 50s life insurance usually are fixed and do not increase over time. It is advisable to sign the contract as early as possible because the younger the person is when signing the insurance contract the smaller fixed premium will be. Usually no medical check up  is required to start using this type of insurance but is it important to know that some leading insurers in UK has a starting period of 12 months during which no money will be paid in case of death. Others insurers however do pay insurance during this period for accidental but not natural causes of death.

Taxation

Money received from this kind of insurance in the case of successful claim can be taxed. Up to 40 % of the amount received from insurer can be used for taxes and become a property of the government. For those people who have a lot of assets and investments it is useful to write insurance in trust. Trust isolates insurance cover from the rest of the assets and allows family members and other relatives receive the whole amount of money from the insurance company.

Factors that have impact for premiums

Premiums for over 50s life insurance will vary depending on the age of the individual, number of dependents, income level and financial liabilities. These premiums are paid on regular basis and insurance companies use investment vehicles to facilitate capital growth of these premiums and when over the 50s person dies a lump sum payment is made to his dependents.
Choosing between different insurance carriers

Most acknowledged over 50s life insurance providers in United Kingdom include “Barclay’s Life Insurance”, “Aegon Life Insurance”, “Aviva”, “Ageas”, “Bright Grey”, “Friends Life”, “Legal and General”, “Pru Protect”, “Scottish Provident”, “Zurich”, “Shepherds Friendly”, “Sun Life” and “Liverpool Victoria”. There are two ways to compare the offers from different insurance carriers. The first one is to find an independent insurance broker who will suggest the best alternatives according to personal needs.
The second way is to contact all these insurance companies by phone or email and request insurance quotes. Either way a person will need to decide on a couple of things. Firstly, the amount of insurance coverage requested and the type of life insurance: term of whole life. If term life insurance is chosen the duration of the contract also has to be decided. After these main criteria are set the person can start comparing the offers.

Whole and term life insurance contracts

People that want to sign a life insurance contract are allowed to choose from two life insurance covers: term and whole life. Term life insurance policies can be classified to level term, increasing term, decreasing term and mortgage term. Mortgage term insurance lasts only as long as there is a part of mortgage outstanding and the value of policy equals the balance of the mortgage. Whole life over 50s life insurance protects the individual until his death. The premiums are higher than for term life insurance and usually after 10 years insurance companies tend to review if the premiums are sufficient to guarantee the chosen amount of cover. If not, premiums can be decreased or increased.

In United Kingdom most whole life insurances are called unit-linked. As a result, life coverage is provided together with investment option and every premium paid by the individual is used to buy investment units after the insurance fee is deducted. The better is the performance of fund the higher is the value of the insurance policy. What is more, these unit trusts can be redeemed for additional over 50s life insurance benefits such as terminal illness or personal accident. When an individual decides that this additional protection is no longer needed he can switch from protection to investment.

Importance of medical check up

Most over 50s life insurance carriers accept people aged between 50 and 80 and some even up to 85. However, only people who are not older that 65 will be accepted without medical check up. However, for people who already have existing medical conditions such as high blood pressure or diabetes it is advisable to consult with independent advisor or whole of market broker. These brokers and advisers usually require provide them details about the health of the insured person. As a result a person can get an unbiased advice and the insurance policy that best fits his individual needs.
For example, a person who has high blood pressure is more likely to suffer from heart attack that not necessarily will cause death but may lead to terminal illness. If a person signed over 50s life insurance without medical check up, he may have not been advised to take additional critical illness benefit. Whole of market broker or independent insurance advisor knowing the medical condition of their client can advice what additional benefits should be bought.

Additional benefits

The most common additional benefits to over 50s life insurance are: critical illness benefit, waiver of premium benefit, total and permanent disability benefit, hospital income benefit and personal accident benefit. Critical illness cover can include up to 35 critical illnesses such as cancer, heart disease and other. Waiver of premium allows people to seize paying monthly premiums if the person is seriously ill, hurt in an accident and is unable to work for some time. With waiver of premium benefit the policy is left in force even if the person does not pay monthly premiums.
Usually most insurance companies require that for some time period after the person became ill the premiums would still be paid. Such companies like “Legal & General” require that the payments still have to be made for the first 26 weeks after the accident. After that time all premiums are waived until the person is fit enough to return to work or the end of the insurance term comes. Total and permanent disability benefit pays out a lump sum of money for people who are no longer are able to work in their professional field. Hospital confinement insurance pays regular benefit stipulated in the contract while the insured person is still in the hospital. Personal accident benefit pays out a lump sum of money if a person suffered from serious accident or illness.

Claim in case of suicide

For a lot of years death by the insured person caused by a suicide have been always exempted from over 50s insurance cover. However, now the legal acts have changed and the dependents can make a successful claim on over 50s insurance cover even when suicide has been committed. Usually if the insured person commits suicide during the first two years of the contract all premiums paid to the insurance company are returned. After the period of two years from the initiation of the insurance policy death benefit is paid to the dependents. This is not a rule however and the individual should always check whether his policy includes this benefit. What is more, the process of making a claim in case of suicide is much more complex and difficult.