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What is over-50s life insurance?

On the face of it, over-50s life insurance pretty much passes the Ronseal test - it does what it says on the tin - providing cover specifically for people aged 50 and above.

At the simplest level, over-50s life insurance aims to provide enough funding to cover any funeral costs or to ensure that those left behind have some financial support put in place. The biggest advantage of such a policy is that acceptance is guaranteed.

Neil McCarthy, sales and marketing director for Direct Life, calls them “traditional policies, providing limited sums assured for modest premiums”.

Some of these basic over-50s plans can be bought for as little as £3.50 or £4 a month fixed premium, but there are a range of options, including setting an age limit at which the customer will stop paying premiums.

Cover set up purely for funeral costs can be in the form of pre-paid funeral plans, meaning customers can pay in one go with a single payment, or monthly with life insurance.

Graham Jones, core business director for SunLife, says: “People often choose this type of plan because it allows them to make both the financial provision and some of the practical arrangements with the same plan.

“Funeral plans can also help protect loved ones from rising funeral prices.”

Such plans have proved quite popular over the past decade. According to Simon Cox, funeral cost expert at Royal London, sales of over-50s and funeral plans have doubled in volume.

He says: “The growth in sales mirrors the rise in average funeral costs, which have increased over the same period from £1,900 to £3,702.”

Although traditional underwritten life policies may be able to offer individuals greater choice and flexibility, another benefit of an over-50s plan is that it can be faster and easier to set up than a standard protection policy, because it is not underwritten.

Further, although a healthy and active person aged 50 and over could get standard rates for normal term and whole of life products, someone in poorer health may still be able to qualify for an over-50s plan.

There is no need to fill in a health questionnaire or pass a medical test, and can be available to people aged up to 80 or even 85, depending on the provider.

Whether or not someone in the 50-plus age bracket qualifies for standard whole of life or term products, or whether they would qualify for an over-50s plan, Andy Nicholls, protection and mortgage adviser for Beaufort Asset Management, believes there is far more choice now than ever before.

He says: “Over the past decade, premiums have decreased as the effect of people living longer filters through, making life cover more affordable.

“The advent of innovative products and providers - Vitality Life for example - has encouraged engagement in a healthier lifestyle through rewards-based added value, such as cheaper gym membership, free cinema tickets and reduced spa days.”