Life Assurance Options for the over 50’s
If you are over 50 and need life assurance then we have searched out the best deals for you and have come up with a few options for you to consider.
Term assurance is the simplest and cheapest form of life cover. You simply select the amount of cover you need and the number of years you need the cover over.
Typical costs for a 55 year old non smoking male would be €16.05 a month with Zurich. If you smoke you can expect to pay almost 90% more (Hibernian €30.12) for the same cover. If you are a female then because females live longer than males the same cover will cost you only €12.11 a month with Zurich. If you smoke the same cover would cost you €23.82. All these premiums include the new 1% government tax introduced this August.
The real plus of this policy is its affordability. Once you are accepted the amount you pay is guaranteed and providing you don’t opt to have cover increasing then the amount you pay remains at a constant level for the life of the policy.
The only downside of this type of cover is that you must select a term. If nothing happens within that term then the cover expires and because the money you pay in just provides the cheapest life cover there is no savings element so you get nothing back.
If you have a conversion option then subject to the policy terms and conditions you can carry your cover over to another policy that can be for another term or can last the rest of your life. A new policy would cost you more because the price you pay will be based on your then age and as we get older the cost of taking out a new policy gets much more expensive.
Currently the most competitive insurance companies tend to be Zurich, Hibernian and Friends First.
Generally you have to be under 70 and in good health with no adverse medical history to take out a policy. Remember the older you are the more expensive it is to take out a new policy.
The best person to advise you is an insurance broker. The internet is also useful for those who wish to do their own research.
Guaranteed Whole Of Life
A whole of life policy does what it says on the tin, providing you keep paying premiums it will pay out.
There are two types of whole of life policy. Guaranteed and non guaranteed. Non guaranteed policies should be avoided as they are subject to review and in future years the premiums you pay can be increased or the cover reduced. They have received bad press because they tend to bomb out in later years and become unaffordable leading to people to cancel them before a claim is paid.
Guaranteed whole of life policies are a different proposition and Hibernian and Zurich would be considered market leaders in the field by many brokers.
Typical costs with Zurich for €25000 cover for a 55 year old male would cost €43.77 a month and for a female € 39.49 a month.
€40,000 of whole of life cover for a 55 year old male would cost €94.07 a month and for a female €81.99 a month with Hibernian.
Whole of life cover is more expensive than term assurance but remember with a whole of life policy cover doesn’t run out.
The max age you can take out a whole of life policy is usually 75 next birthday and some companies will permit cover as low as €5,000. Remember you have to be in good health with no adverse medical history to take out a policy and you may be required to attend for a medical.
Over 50’s Life Assurance
This type of contract is designed for those over 50 and has had huge success in the UK.
The main attraction is you can get guaranteed cover without the need to be underwritten or to have a medical. So you are guaranteed to be accepted regardless of any health issues you may have.
Irish Life is the newest entrant to the market with their 50+ Easy Life Cover policy.
Premiums start at €15 a month and for that amount a male age 50 would get €5,087 cover and a female would get €6,196. The most cover you can take out is €25,000.
It is interesting to note that with this policy smokers pay the same rate as non smokers. In other forms of life assurance smokers always pay more.
Reading the policy terms and conditions I note you are not fully covered for the first two years. However, in view of the fact that you don’t have to provide any medical information and that you are guaranteed to be accepted this is probably viewed by many as an acceptable risk.
If during the first two years you die as the result of anything other than an accident Irish Life will pay your estate a refund of the payments made. If during the first two years you die as the result of an accident they will pay the full benefit. After two years you are covered no matter how you die.
The amount you pay is guaranteed never to increase and you stop paying when you are 90 with cover continuing for the rest of your life. There is no cash-in value on the policy so don’t view it as a savings.
A valuable free benefit is that Irish Life provide their 50+ Easy Life Cover policyholders with free access to a nurse on call 24 hours a day, 7 days a week via a low call number. You can use this service for free information on medicines, minor illnesses, counselling for bereavement or illness or information on the legal and financial aspects of bereavement.
The policy is not suitable for people who need cover in place immediately (so it’s not really suitable to be used as collateral to cover a loan). If you are happy to provide medical details then you may be able to get life cover at a lower cost via a term or whole of life policy.
There are two main providers Irish Life and An Post.
Cuna Mutual and Credit Unions.
FamilyLIFE+ is a policy provided by CUNA Mutual Life Assurance with offices in Dublin. They will cover people up to age 70 without medical underwriting. The max they will cover is €10,000
Persons age 50 to 59 can get €2,500 for €12.50 a month and €10,000 for €35 a month plus the 1% government levy. Premiums are not subject to review.
The big plus of this product is affordability, the fact they settle claims within 48 hours and they have a relatively short 6 month pre existing conditions exclusion period.
The product is not sold through intermediaries but can be bought through your local credit union or online www.cunainsurance.ie. In October it will be available by phone. Premiums are not subject to review.
- Term Assurance – most competitive providers at present are Eagle Star /Zurich, Caledonian Life, Friends First and Tesco.
- Whole of Life – most competitive providers for the guaranteed product are Zurich and Hibernian Aviva.
- Over 50’s cover – main players in the Irish market are Irish Life with their 50+ Easy Life cover plan, An Post with One Direct’s Over 50s Life Assurance and Cuna Mutual. LABrokers.ie offer Over 50’s cover online.
- Over 50’s cover is ideal for persons who have a medical condition that otherwise makes them uninsurable.
- Reference - The web site www.itsyourmoney.ie have two excellent publications which you can download for free. The first called ‘Life Insurance Made Easy’ and the second publication is ‘Getting Financial Advice’.
Another useful web site is the Irish financial discussion forum www.askaboutmoney.com
- Don’t buy life assurance that you don’t need or already have.
- Whole of life policies are usually used as part of inheritance tax planning.
John Geraghty is CEO of online discount brokers www.LABrokers.ie