Over 50s plans
(also known as funeral expenses plans and whole of life plans)
HOW THEY WORK
- An over 50s plan is a life insurance policy which pays out a fixed lump sum amount when you die.
- They are typically purchased with funeral costs in mind, hence why they are often referred to as funeral expenses plans.
- An over 50s plan could work to your financial advantage if you die early in the life of the policy because your claim will be for more than you have paid in.
- An over 50s plan can be more flexible than a funeral plan as the money could be used for something other than a funeral although typically over 50s plans are purchased to cover funeral expenses.
- Over 50s plans tend to guarantee acceptance without the need for complicated medical forms or health checks (as do funeral plans).
- Monthly premiums are low which make them an affordable option.
- They are guaranteed to pay out from the day you arrange the policy but please check the small print as this can vary.
- You could end up paying more in monthly premiums than the plan pay-out value if you live longer than expected for example.
- If you stop paying, you may find there is no cash-in value – many of these plans require you to keep paying until the end of your life.
- When inflation increases the cost of funerals, you may find your funeral costs more than your insurance policy is designed to pay out.