Most homeowners buy some life insurance when they purchase their first home. These insurance policies are typically designed to cover the term of the mortgage. But what happens once that term is over? If you took out a life insurance policy when you first stepped onto the property ladder, the chances are it was a 25-year term, linked to the mortgage. But many people in their fifties and sixties still have mortgage debts and will continue to work. In fact, a recent report showed 1.2 million people continue to work beyond the age of 65. If your family relies on your working income to maintain living standards, it’s worth checking you have adequate insurance in place. Life or health insurance can provide financial security for your family, should you die or be unable to work through ill health – a real possibility in later life.
Don’t be afraid of life insurance
The cost of life insurance increases with age, but this doesn’t mean it is prohibitively expensive for those in their fifties. A 50-year old with no health problems should pay less than £15 a month for a 10-year policy with £100,000 of cover. A 25-year old could buy the same cover for under £5 a month. Insurers will ask more in-depth health questions of older applicants, and some will need a medical. Some insurers also sell ‘Over 50s’ life insurance — you may have seen TV or newspaper advertisements about these policies. They can look attractive: most claim to accept all applicants without a medical. However, they are designed to cover smaller sums, typically to help with funeral costs. There is no fixed-term, so the insurance remains in place for as long as the policyholder pays the premiums. This means people who live longer than expected can pay far more in premiums than the policy eventually pays out. It pays to shop around and take advice.
Cover for ill-health
Even if you are in your fifties, the chance of dying within the next ten years remains relatively small. But there’s a more significant chance of suffering ill-health, affecting your ability to work. Talk to us about whether critical illness or income protection insurance might be appropriate. These can be more expensive, but may provide greater peace of mind. We can help you ensure you have the right financial protection in place.