Term life insurance vs over 50 life insurance – which is right for me?

Term life insurance - also called 'life insurance' - runs for a specific length of time and helps look after your loved ones financially when you’re no longer here. It pays out a sum of money if you pass away or are diagnosed with a terminal illness during the policy term. This payment can help your loved ones maintain their way of life and keep paying the bills. 

Our Life Insurance Plan offers two different types of life insurance cover. With our level cover, the pay-out amount stays the same, whilst with our decreasing cover option, the pay-out amount decreases each month. You can compare the types, consider what feels right for you, then choose the length of cover you'd like. It's worth mentioning that with us, you have to be between 18 and 77 to apply. In most cases there won’t be a medical exam, but we'll need to know about any pre-existing medical conditions that we ask about. Also, our Life Insurance Plan has no cash-in value at any time. If you cancel the policy, the cover will end and you will get nothing back.

Over 50 life insurance offers you cover for the rest of your life, rather than for a fixed term. For many, it’s an affordable and flexible option when it comes to setting aside some cash for the future. It can also be easier to get life cover with this type of plan because you won’t have to answer any questions about your health or medical history to be accepted.

Our Over 50s Life Insurance guarantees to pay out every penny of the cover amount as a lump sum if you die for any reason after the first 12 months of having the policy – or if you die because of an accident within the first 12 months. However, if you die before the first 12 months are up, and it isn’t an accidental death, we won’t pay out the cover amount, but we’ll pay a sum that’s equal to the premiums that have already been paid. It's also worth knowing at this point that our over 50 life insurance policy has no cash-in value at any time. This means, if you no longer want the cover and cancel it, or if you stop paying your premiums, your cover will end and you won't get back any of the money you've paid in.

Because you’re guaranteed a payout on death, you could leave this money as a small gift to loved ones, put it towards outstanding debts or put the money towards your funeral costs. 

Term life insurance and over 50 life insurance can serve different needs. It is important to understand what you are wanting to cover.

Over 50 life insurance runs for your whole life, meaning if you continue to pay premiums, it will pay a claim. For term life insurance, cover is for a set term and once the term has ended you will no longer be able to claim. For both products, there is no cash-in value at any time, and if you stop paying premiums, you will lose the cover.

With our Over 50s Life Insurance, we don't require any medical underwriting prior to a policy being taken. This means that you're guaranteed to get cover. If you live for more than 12 months after the policy starts, it will pay out the full cover amount. If you die within the first 12 months, it will return the premiums paid, unless your death is as a direct result of an accident, where it will pay the full cover amount.

With our Life Insurance Plan, you'll be asked some underwriting questions about your medical history, such as any pre-existing conditions. Dependent on your circumstances, it could be that the amount you pay in premiums will be higher than your original quote once it has been underwritten. It is very important to answer all questions truthfully. For term life insurance you are covered for the full amount from day one.

Because Over 50 life insurance is automatically accepted without any underwriting, and also runs for whole of life guaranteeing a payout, it is likely that a term life insurance policy would offer more cover for the same premium. However, as term life insurance is an underwritten policy, the premium can be higher once fully underwritten.

If you're not sure which type of policy is right for you, it might be worth seeking advice from 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.