Over Fifties Life Insurance Cover You May pay more Than You Get Out
Summary
This article airs the problems with the over fifties plans that do not ask questions about your medical history but are they financially worth it? Continue reading this article for lots more information.
Becoming increasingly popular are the over fifties life assurance plans.
They promise acceptance without medical questions and are frequently advertised by well known stars like Jerry Hall and David Frost. Consumers who buy these plans could be paying a lot more in than their beneficiaries will get out.
pledging a pay out on the insurance policyholder’s death, payments begin at about 8 pounds escalating to about £64. Being sold to clients between 51 and 79 the settlement is controlled by the payments paid, age and gender when the policy starts.
Ominously, no information about their health is required. Some insurance plans cease after a certain amount of time, but are valid until the insurance holder dies. In other insurance plans the payment is taken until the holder dies, in spite of this insurance holders could pay more in than they get paid out depending upon when they pass away.
Referring to adverts for Legal and Generals over 50’s life Cover Plan, Justin Parks of independent financial advisers CBK Colchester states ‘I can’t understand David Frostapproving this style of insurance product. He is first-rate act, but for this type of plan the same cannot be said.’
Managing director at Legal and Generals over 50’s life Cover Plan, Steven Hedges defends Havers’s role, saying he’s just making consumers conscious of the insurance plans existence , for which the demand is considerable .He says, ‘The appeal is their affordability because of their guaranteed acceptance process and the low premiums.’
Nevertheless, you could get an improved deal elsewhere buying regular policy on the same terms ‘consumers could get twice or three times as much for their money from a regular life insurance cover, in exchange for answering a few questions.’ Says Greg Halliday of TGB financial services.
Not enquiring about any health history imposes much dearer fees as these policies interest clients with pre-existing complaints who may pass away before the Insurance Company has covered its cost. Insurers also freeze any payouts for the first 1 or 2 years to shield themselves. A refund of the payments made is usually refunded if an insurance holder dies from natural causes during this time.
Director of financial services at Direct Line, Jason Oakley, states that the cost could be less for standard life insurance but generally by the time you reach your fifties, many have endured some form of ill health, thus why peoplefavour the over 50’s plans. Plan holderspaying in more than they ever get backis one area he doesn’t concur with. ‘We limit the payments, when we compile the plan,’ he states, meaning once policyholders have paid the sum assured their premiums cease.
Most over-fifties insurance plans do ultimately have cut off postions, but most customers have paid more than necessary before this time. Premiums usually cease at 85 with the Liverpool Victoria plans and the PO running them for a set term.
The main reason people buy these plans is to pay interment expenses. However, the final settlement may not be nearly enough. A pre-payment insurance policy would perhaps be a better alternative with Sun Life Direct providing 5 packages costing between 2,510 pounds and 3,286 pounds. These can be paid for over a period of three years.
