‘Over 50 Life Insurance Comparison’ Case Study’
Over 50 Life Insurance Comparison:
Background | Typical Case Study
Over 50 Life Insurance Comparison Case Study: Mike is age 73 and a retired COOP Milkman on £12,250pa pension. His wife Sue is age 70, a retired clerk on £8,600pa pension. They have been married for over 40 years and have 1 daughter, who has given them 3 grandchildren. Mike and Sue have not seen their family for a while. They are self isolating from them due to Covid 19 lockdown rules.
Mike sadly had to retire early mainly due to chronic rheumatoid arthritis & is not so active now. He then had a heart attack last year, which he has recovered fairly well from since. Sue suffers from a raised blood pressure & high cholesterol for last few years. Neither of these prevent her from doing her daily tasks and are both under control with medication.
Looking back, Mike did once have a family term life insurance policy. It was sold to him via his bank when their daughter was dependant, however this ended years ago. Both have wills but these have not been updated for a long time. They have around £11,500 in ISA savings, which they don’t really want to touch if possible. Sue is usually in charge of the family finances.
Recently they were both watching daytime TV and saw a Over 50 Life Insurance advert. It was promoted by a well known personality and also offered a life insurance free gift pen to make an enquiry. So they started chatting about this morbid subject with Sue having only very recently lost her own mother age 95.
They then both look online at what MSE Martin Lewis has to say about Over 50’s Life Insurance and all their pro’s and cons.
Sue and her 3 sisters sadly had to help pay toward her own late mother’s funeral estate costs. This was more expensive & prooving complicated than she thought, as she had no life insurance and also not made a valid will.
Given the current climate re Coronavirus, they decided they now wished to address these issues themselves. They wanted to both help toward covering their own funeral costs and hopefully leaving a small lump sum legacy for their 3 grandchildren.
‘Over 50 Life Insurance Comparison’ – Enquiry:
They now log onto the internet looking for more information on Over 50 Life Insurance comparison or Funeral insurance. Sue is aware that trying to get life cover for them both could be difficult having various pre-existing health issues. They don’t want to use a lump sum of their savings toward a prepaid funeral plan, as they know it may cost them over £6,000 for 2 x basic plans.
Mike and Sue wanted a plan that will always insure themselves for their whole life, rather than term life insurance that runs any specified period. For example, Sue’s friend of a similar age told her she had a good value life insurance plan recently bought online without advice. However, when she showed her the paperwork they found her life insurance policy was only over 20 years term.
As Sue comes from a long lived family, many often living into their 90’s, she felt this was no use to her. Mike given his own health issues is not so sure he will live that long. They ideally think they want around £5,000 / £6,000 lifecover each. Sue decides having checked her budgets that they can afford about £35pm/£40pm for each policy. They also want fixed premiums being on pensions.
So they enquire through our website thinking about getting simple no medical policies. Ideally, they were not looking for any financial advice and believed an easy quick application is their best way forwards.
We call back and after explaining who we are. We have a good chat about both their current health situations, requirements & budgetary needs.
‘over 50 life insurance comparison’
‘Over 50 Life Insurance Comparison’ – Advice:
They listen to our generic advice & thought processes. We explain the main comparison differences between underwritten over 50 life insurance, which ask medical questions & those no medical over 50s life insurance comparison deals which don’t.
We confirm that whole of life means the policy has an unlimited lifespan, so does not run a specified term ie; pays out whenever one dies. This means it is often more expensive than a term insurance plan (like Sue’s friend had) as it will payout eg; you live until age 150.
These generic key features are detailed as follows…
No Medical – Over 50’s Whole Life Insurance
- Guaranteed acceptance plan mean ‘No health or lifestyle questions
- May not fully insure the first 1/2 years upon a natural death
- Insurers may refund premiums during initial 1/2 years re natural death causes
- During this initial period you usually can only claim due to accidental death re first 1/2 years
- Funeral Funding Provider options & paid direct eg; £300 to COOP, Golden Charter or Dignity
- Often life insurance premiums stop after ages 90/95 yet still maintain policy lifecover after
- Most Over 50 Life Insurance Providers only use 1 Insurers plan & often with limited flexibility
- Lump sum cover is usual plan type & often on a level basis
- Generally much lower levels of lifecover compared to a policy asking medical questions
- You may pay more in premiums than cover levels on some Over 50 plans or indeed Over 60’s
- Over 50 Life Cover or Plan Costs may have a cap limits & so maybe inadequate for your needs
Conclusion : Ideal if you have poor medical health or unable to get affordable underwritten cover
Over 50’s Funeral Insurance – No medical
- Similar features and terms to Over 50’s no medical lifecover [ as above ]
- Usually not fully insure the first 1/2 years upon a natural death
- Providers may refund premiums during initial 1/2 years re natural death causes
- Funeral costs only then covered after this initial period rather than a lump sum
- Plan choice of Cremation or Traditional burial all costed accordingly
Conclusion : If you are a fit & healthy this may not be the best deal compared to medical life cover
Medical – Over 50’s Whole Life Insurance
- Underwritten whole lifecover covers you immediately once terms agreed
- This means there is no 1/2 years initial waiting period like the above schemes
- Will ask health & lifestyle questions before offering any deal
- Lump sum cover is usual plan type & on a level or indexed linked basis
- May also require GP reports & a medical tests for some dependant on Insurers
- Even with some lifestyle issues Insurers may consider terms off an application
- Premiums can be fixed or reviewable and payable until a death claim
Conclusion : Over 50’s medical lifecover may offer £1,000’s more cover against no medical plans
Review for Mike & Sue:
After a fair & personal analysis, they thank us for explaining these generic differences between the main types of over 50 life insurance policies
Firstly, we discuss if it is best Mike has a no medical over 50’s life insurance type lump sum plan. This means he will not be asked any lifestyle questions. His pre-existing health issues are such that we think no mainstream Insurers will offer him any affordable whole lifecover currently.
He may also wish to consider including the funeral funding options. That will enable him to get upto £300 additional contribution by a funeral plan provider like COOP. This however means his main policy benefits would usually go direct to the funeral plan provider first rather than wife Sue. They will think on this aspect.
For Sue, she agrees it’s maybe best that she has instead a medically underwritten insurance policy. This will be asking various health & lifestyle questions, which she is okay about. At this stage, we don’t believe an Insurer will think these issues disclosed may affect offering her a life insurance deal. However, this will still be subject to full underwriting before being offered terms.
They both agree that given they are on pensions they can afford around £40pm each, or £80pm total budget. They would prefer fixed premiums, so understand their cover will not be inflation proofed.
Research & Recommendations:
After finishing our discussions, we then advise them we will contact various Insurance underwriters. We need to re-confirm their suitability for their life insurance types given health status. Sadly, none will offer Mike any underwritten cover as we suspected but they will for Sue.
We also think that for Mike his policy will likely offer much lower levels of cover than Sue’s. We then check the Insurers quoting in the marketplace for over 50’s life insurance off our panel and given all the above considerations. As such, dependant on this it may make more sense for Mike to pay upto £50pm and £30pm balance for Sue.
After our research, we find Sue & Mike could both get around £6,000 whole lifecover each. This would be for the 2 different types of over 50’s life insurance ie; medical & no medical plans.
As suggested initially, Mike would pay around £50pm for his no medical plan and Sue £30pm for her medical plan. This would still be within total budget fixed premium £80pm, which they hopefully will agree too, as it makes sense. Both premiums are fixed and the cover is not inflation proofed as requested.
We email them these various over 50s life insurance comparison options, a copy of the recommended Insurers Key Product Features plus quotes, definitions & our legal disclosures.
Over 50 Life Insurance Comparison Case Conclusion:
Calling up Sue & Mike later to discuss all this, we re-explain our findings. They are pleased that the life insurance cover worked out within their overall budget and agree with the price splits. Mike does like the idea of the funeral funding option. This means Sue would only get the balance of any proceeds after any funeral payment first.
They both understand that his lifecover will have an initial waiting inception period. If so, the Insurer will still refund their premiums plus interest if sadly he passed away beforehand of natural causes. Sue agrees they could always then dip into some of their savings.
Sue is also happy with her underwritten over 50s life insurance comparison policy quote & policy terms. They both want to finalise all these broker only plans. So we help go ahead and now complete their application’s to the nominated Insurers.
In this process, we also recommended Sue’s plan is setup into trust using the Insurers standard forms. This means her plan benefits in trusts should help to avoid probate, or potential Inheritance Tax IHT & go to nominated beneficiaries. We request they provide us with details of their requested trustees and beneficiaries. This will enable us once terms are agreed to place the policy into Insurers trust from outset.
We help arrange their 2 policies via a Broker deal with the Insurers & agree to send a fully documented report afterwards confirming their various demands & needs.
They will pass on all our contact details & we look forward to helping them also.