Over 50 life insurance: premiums and paying out

It's a type of life insurance that can help you leave a little something behind for the people you love. With us, you need to be aged 50 to 80 to apply. It’s whole of life cover, which means it lasts for the rest of your life rather than a specific term.

When you take out an over 50 life insurance policy with us, you’ll either pick a cover amount or a premium amount.

The cover amount is how much we’ll pay out when you die. Whatever cover amount you choose, we’ll use that to work out how much you pay in premiums each month.

Or you can approach it the other way and decide how much you’d like to pay each month. With us, it can be from as little as £5, up to £100 a month. Based on that, we’ll work out how much your cover amount is.

Your monthly premium and cover amount will not change. As a result its worth noting that inflation can reduce its value over time.

This is not a savings or investment product. It will only pay out on a successful claim when you die. If premiums aren’t paid when due or if the policy is cancelled the plan will end and you'll get nothing back.

You’ll pay monthly premiums for the entire length of what’s called your premium term. This will be from when you take out your cover until:

• you’ve had your policy for 30 years
• you reach the policy anniversary date after your 90th birthday
• you pass away

Which of these applies to you depends on what comes first. We’ll explain your premium term when you first take out cover. You’ll also be able to find it in your policy schedule.

To help clarify, let’s look at some examples:

• You’ve had your policy for 30 years – You take out a policy when you’re 55. You only have to pay premiums for 30 years or until the policy anniversary date after your 90th birthday, whichever comes first. In this case, paying premiums for 30 years brings you to the age of 85. At this point, you won’t have to pay any more premiums, but your cover stays in place. It’ll continue until you die, no matter how long you live. After you pass away, we’ll pay out the full cover amount.
• You reach the policy anniversary date after your 90th birthday – You take out a policy when you’re 69 years old. You only have to pay premiums for 21 years because you turn 90 before you’ve had the policy for 30 years. After your 90th birthday, you stop paying monthly premiums from your policy anniversary. So, if your birthday’s in February and you originally bought your policy in May, you’ll pay your final premium in the May following your 90th birthday. But your cover continues until you die, no matter how long you live past 90. After you pass away, we’ll pay out the full cover amount.
• You pass away – You take out a policy and die for any reason after you've had the policy for 12 months or more. At this point, your policy ends and we'll pay out the full cover amount. This means there's no need for anyone (for example, your family) to pay any more premiums.

Depending on how long you live, you could end up paying more in total premiums than the cover amount paid out at claim.

During your premium term, you must make sure you pay your premiums when they’re due. If you stop paying your premiums or you cancel your policy, your cover will end and you won't get anything back.

We guarantee that we’ll pay the cover amount if:

• you die for any reason after you’ve had the policy for 12 months or more, or
• you die because of an accident during the first 12 months.
  

If you die within the first 12 months, and it wasn’t due to an accident, we won’t pay out the cover amount. Instead, we’ll pay a sum that’s equal to the premiums you’ve already paid. 

The short answer is, you can decide who gets a payout from your over 50 life insurance policy. There are two ways to do this, either by placing your policy into trust or writing it into your will.

Placing your policy into trust

By wrapping your money up into a trust, which is a legal arrangement, you can decide exactly who gets the money from any payout. They’re known as your beneficiary, and you can pick just one person or have multiple different people.

You also decide who’s responsible for handing out the money to those beneficiaries when the time comes. They’re known as the trustees. It's worth knowing that if you put your policy into a trust, any payout isn't generally included as part of your estate, which is made up of all your property, money and possessions.

Putting your money into a trust means your insurer might be able to pay out faster (if the claim is accepted). Plus, any money your beneficiaries receive is often exempt from Inheritance Tax. However, you’ll need to look into this because liability for tax depends on your personal circumstances and tax rules, which may change over time.

If you're concerned about your estate's liability for tax, chat to a financial adviser. If you don't have a financial adviser, you can find one at unbiased.co.uk. Please be aware that you may need to pay for this advice.

Discover how we can help make sure any payout lands directly with the people you want it to.  Explore the Aviva Trusts we offer.

Writing it into your will

If you don't put your policy into a trust, then any payout is included in your estate. But you can still say who should benefit from it when you die. By leaving instructions in your will you can say who gets what from your estate. 

However, if you die without creating a will, you won’t be able to choose who gets the money from your policy. Your estate, which will include any payout, will be shared out based on the current laws that say who inherits in these circumstances.