Provides your loved ones with a cash pay out if you pass away during the policy term.
Life insurance with no medical questions that guarantees a cash pay out to your loved ones.
Helps to replace a percentage of your income if you’re unable to work due to illness or injury.
By: Rosie Ritchie
Protection Expert
5 min read
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Senior life insurance simply refers to a life insurance policy that could be suitable for people in their senior years (such as over 65).
It can be taken out to provide your family with a cash pay out after you’re gone, which could help towards:
There are several types of life insurance for senior citizens including whole of life, term life insurance and an over 50s plan.
The best option for you will depend on your needs and circumstances, however, many seniors take out an over 50s plan as it offers cover without requiring any medical information and lasts for the rest of your life.
Continue reading to learn more about life insurance and its benefits.
You may wish to take out life insurance to help reduce money worries for your family after you’re gone.
Or you may want to help relieve the financial burden from them in terms of paying for a funeral or helping to cover an inheritance tax bill.
The most popular type of life insurance for senior citizens is over 50s life insurance, also known as an over 50s plan or guaranteed life insurance.
However, this may not be the best option for you depending on your specific needs and personal circumstances.
Below we’ve outlined three different types of life insurance that you may consider in your later years:
Over 50s life insurance for seniors [over 50s plan]
Over 50s life insurance is specifically designed for seniors.
It’s a good option for those who may have health conditions and who’d like to leave some money behind to help cover funeral costs or as a cash gift for loved ones.
Key features:
While an over 50s plan is a good choice for many, if you’re in good health then you may consider whole of life insurance instead.
This is because the application includes medical questions and being a healthy applicant could work in your favour for cheaper premiums. Pay out thresholds are also higher compared to an over 50s plan.
However, it’s important to bear in mind that with both over 50s and whole of life cover, you’ll need to continue paying premiums until you reach a specific age (such as 90) or until you pass away.
This means it’s possible that you could pay more into the policy than what’s paid out to your loved ones eventually, depending on your age and how long you live for.
Term life insurance for seniors
Term life insurance may be best for seniors who are still paying off a mortgage or supporting a family.
It’s often the cheapest type of cover, especially for applicants living a healthy lifestyle and without any medical conditions.
Key features:
Term-based cover provides a pay out if you pass away during a specified period (up to the age of 90). The pay out potential is often higher than with other types of cover, but the premiums tend to be lower as there’s no guarantee of a pay out.
Although, if you have a health condition or have a dangerous hobby or job then this could affect how much you pay each month as the application includes health and lifestyle questions.
Term based cover could be ideal if you want to help protect a mortgage, or an income if you’re still working and have dependents living at home with you. You can choose whether your cover amount remains the same (level cover) or decreases over time (decreasing cover).
Whole of life insurance for seniors
Whole of life cover could be a good choice if you’d like to leave an inheritance for loved ones or help to cover funeral costs or family living expenses.
The application includes medical questions, so it’s better suited to seniors in good health.
Key features:
Whole of life insurance provides lifelong cover from day one, providing a pay out to your loved ones when you pass away, not if.
Naturally, this type of policy can be more expensive than term-based cover.
However, it’s worth exploring whole of life insurance in your later years, particularly if you’re in good overall health as you may be able to secure a larger pay out for your loved ones, and potentially better premiums compared to an over 50s plan.
Whole of life insurance is often used to help avoid or minimise inheritance tax for loved ones by writing the policy in trust. A trust keeps the pay out separate from your taxable estate after you’re gone.
We’ve compared the key features of these three policies in the table below:
| Over 50s plan | Whole of life insurance | Term life insurance | |
|---|---|---|---|
| What is the eligible age range? | 50 – 85 | 18 – 84 | 18 - 86 |
| Are medical questions asked? | No but some insurers ask for your smoking status | Yes | Yes |
| Is acceptance guaranteed? |
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|
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| How long does it cover you for? | Lifelong | Lifelong | Set term (e.g. 5 – 20 years, up to a maximum age, such as 90) |
| What is the pay out type? | Guaranteed fixed lump sum pay out after 12 - 24 month waiting period | Pays out a fixed lump sum when you pass away, as long as you keep paying your premiums | Pays out if you pass away during the policy term. Choose from fixed or decreasing lump sum amount |
| What is the maximum pay out? | £10,000 - £20,000 depending on the insurer and your personal circumstances | Up to £1 million depending on your circumstances | Up to £1 million depending on your circumstances |
| What is the cover typically used for? |
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Senior life insurance can start from just £5 a month through Reassured, depending on your personal circumstances and the type of policy you choose.
Excluding over 50s life insurance, factors which affect the cost of senior life insurance premiums include:
For over 50s life insurance, how much you pay depends on your budget and the amount of cover you need.
Typically, the minimum monthly premium is £5 and the maximum is £75 for a single over 50s policy. Your age and smoking status can also affect the cost.
In the table below, we’ve provided some examples of how much cover you could secure based on your age for a monthly premium of £30.
| Applicant age | Applicant details | Level term life insurance (over 10 years) | Whole of life insurance | Over 50s plan |
|---|---|---|---|---|
| 50 | Non-smoker in good health | £244,350 (LV=) | £21,812 (Zurich) | £9,305 (OneFamily) |
| 55 | Non-smoker in good health | £139,502 (AVIVA) | £18,150 (Zurich) | £8,426 (OneFamily) |
| 60 | Non-smoker in good health | £69,709 (Scottish Widows) | £14,721 (Zurich) | £7,210 (OneFamily) |
| 65 | Non-smoker in good health | £39,307 (Scottish Widows) | £11,093 (Zurich) | £5,971 (OneFamily) |
| 70 | Non-smoker in good health | £20,947 (AVIVA) | £8,449 (Zurich) | £4,288 (OneFamily) |
| 75 | Non-smoker in good health | £13,153 (L&G) | £6,022 (Zurich) | £2,978 (SunLife) |
The cover amounts in this table have been taken directly from our own quote comparison system.
You may want to write your senior life insurance in trust to help protect your pay out from inheritance tax (currently charged at 40% above the £325,000 threshold).
Placing your policy in trust is a process that transfers ownership of your policy to a chosen trustee (or trustees).
This detaches the value of your policy from your estate, which could lower the amount of inheritance tax your family may have to pay.
Writing your life insurance in trust has other benefits too, including:
Reassured provide a free and simple trust-writing service with most of the policies we arrange. We’ve helped over 30,000 people set up their life insurance in trust.
Yes, it’s possible to get senior life insurance quotes online with some insurers and policies.
At Reassured, we offer a buy online service for term-based life insurance and over 50s plans. Simply click through to our online form to receive your free quotes.
75% of our customers receive an immediate online quote or a telephone call from one of our experts within 1 hour to discuss their requirements.
To help guide those aged 50 and over, our in-house life insurance experts have created a library of in-depth and informative articles.
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