Over 50s life insurance: do you need it?

Collaborative Post | No matter what stage you are at in life, having financial protection can always come in handy, even in your 50s and beyond. No matter if you're retired or planning for retirement, an over 50s life insurance plan can help support the people you care about if anything happens to you.

But is life insurance necessary at this stage of life, or just another monthly cost? In this guide, we'll look at the types of cover available, the pros and cons as well you may or may not need cover.

Photo by Xavier Mouton Photographie on Unsplash

What is over 50s life insurance?

Over 50s life insurance is a specific type of cover designed for people aged 50–80 (sometimes up to 85). At this stage in life, it can be used to cover future costs like a funeral or to leave money behind for your loved ones.

Unlike a standard policy, it offers guaranteed acceptance with no medical exams. This means even if you have minor health issues, they won't affect your ability to get cover.

As with any type of life insurance, the policy pays out a cash payout on death. To remain covered, you are required to pay a monthly premium. Under 50s policies usually include fixed premiums so you won't have to pay a higher rate later on in the policy.

Who might need over 50 life insurance?

There are a number of reasons why you may need life insurance cover, most importantly to look after your loved ones. It can also be needed if:

• You don’t have savings set aside for funeral costs.
• You want to leave something behind for your family (even if small).
• You’re not eligible for traditional life insurance due to health issues.
• You’d like peace of mind, knowing something is in place.

Who might NOT need over 50s life insurance?

Life insurance isn't for everyone. You may not need cover if:

• You have sufficient savings or assets (e.g., property, ISAs, pensions).
• You have no dependents or financial commitments.
• You’d prefer to invest your money elsewhere for better returns.
• You already have a funeral plan or another policy in place.

Pros and cons of over 50s life cover

As with any type of protection, there are always pros and cons attached and over 50s life insurance is no exception. While cover is easy to obtain, your premiums may cost more, and the payout may be less compared to standard policies.

Pros:

• No medical checks required.
• Fixed monthly payments.
• Can be a straightforward way to cover funeral expenses.

Cons:

• You might pay in more than your family receives.
• Limited payout compared to traditional life cover.
• Most policies have a waiting period (no payout if you die in the first year or two from natural causes).

Alternatives to consider

Over 50s life insurance isn’t the only way to prepare financially for the future. Depending on your needs, goals, and existing assets, some of the following options may offer better value:

• Saving in a high-interest account: Building a savings pot using an ISA, savings account, or pension drawdown plan may allow you more control over your money. Unlike life insurance, your funds are accessible whenever you need them and could also earn interest over time.
• Funeral plans: If your main concern is covering funeral expenses, a pre-paid funeral plan may be more cost-effective. These allow you to lock in today’s prices and make monthly payments, often without medical checks.
• Traditional life insurance: If you’re in good health and under 65, you might still be eligible for term life insurance or life assurance, which can offer a larger payout and better value than over 50s plans, especially if you’re looking to provide a more significant financial legacy.
• Writing a will and estate planning: Life insurance is just one part of legacy planning. Ensure your will is up to date and consider how your assets (such as property, savings, and pensions) will be distributed. A solicitor or financial adviser can help you minimise inheritance tax and make sure your wishes are carried out.
• Investments: Some people prefer to invest in low-risk bonds, dividend-paying shares, or property as a way to grow wealth and leave something behind. Of course, this comes with risk, so it’s best suited for those comfortable with long-term planning.

Questions to ask yourself before buying

Questions to ask yourself before buyingBuying life insurance is a personal decision, and it’s worth spending time thinking about what you need. Here are a few key questions to guide your thinking:
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• What are my monthly financial commitments? - Make sure the premium won’t put pressure on your finances, especially as your income might reduce in retirement.
• Do I have any debts, a mortgage, or financial dependents? - If not, life insurance might not be essential. But if your death would leave others with financial strain, it’s worth considering.
• Do I want to leave a financial gift, or just cover costs? - Consider whether you’re planning to cover funeral costs, support family, or leave a legacy for children or grandchildren.
• How long will I need to live for the policy to be worthwhile? - Many over 50s policies require you to live for several years before the payout exceeds what you've paid in. Calculate the break-even point based on your premiums.
• Could my money be better used elsewhere? - Compare the total cost of premiums with what you could save or invest instead. Sometimes a savings account or ISA may deliver more value.
• Do I already have cover in place? - If you already have a workplace pension, death-in-service benefit, or other life insurance, you might already be covered without realising it.
• How flexible is the policy? - Some providers allow you to reduce payments or pause cover if your financial situation changes. Check the small print before signing up.

Is it right for you?

There’s no one-size-fits-all answer. Over 50s life insurance can offer peace of mind, especially if you’re worried about leaving behind unexpected costs. But for others, it may not always be the best financial move.

Before deciding, take time to compare policies, think about your long-term goals, and speak to a financial adviser if needed. Whether you’re looking to help cover funeral costs or simply want to leave something behind, there’s no harm in exploring your options.

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Disclaimer: this is a collaborative post.