National Friendly has launched a life assurance product for 50 to 80-year-olds.
The Guaranteed Life Assurance Plan pays out a guaranteed cash lump sum when a policyholder dies and can be used to help pay for funeral costs, outstanding debts or to leave behind a cash legacy for loved ones.
The policy can also be placed in trust so beneficiaries receive a tax-free lump sum.
Wayne Carter, head of sales and marketing at National Friendly, said: "Average funeral costs have almost doubled in the past 10 years and the average person in the UK owes £8,000, on top of any mortgage debt.
"Our Guaranteed Life Assurance Plan can provide a really useful financial cushion for the family at a difficult time. It is also a way of leaving something nice behind for family, perhaps to help pay towards a deposit on a house or a holiday."
Premiums start from £20 per month, up to a maximum of £100 per month, and remain the same for the duration of the policy.
Policyholders can either decide how much cash they would like the policy to pay out or the premiums they want to pay each month, and all applicants are guaranteed acceptance, irrespective of medical history.
Kusal Ariyawansa, chartered financial planner at Manchester-based Appleton Gerrard, said: "Assuming the maximum premium and sum assured is £100 and £5,000 respectively, you would have paid for that sum assured in four years' time.
"The payout is restricted to 150 per cent of the premiums paid if death occurs within two years of starting the policy.
"While this is a good deal, you would need to weigh up the difference after the fourth anniversary, which is why it is important to consider all such products that are available in the market."
The launch comes as the Bristol-based mutual insurer celebrates 150 years in business this year.
Founded in 1868, the society also offers private health insurance policies as well as savings and investment plans.
aamina.zafar@ft.com
