Summary
This article airs the problems with the over fifties plans that do not ask any medical questions but are they worth buying? Carry on reading for more information.
The over fifties life insurance plans are selling like hot cakes.
and are regularly promoted by well known stars like Jerry Hall and Michael Douglas. Consumers who purchase these life insurance plans may be paying much more in than their beneficiaries will get out.
Promising a settlement on the policyholder’s death, premiums start from about six pounds growing to about 62 pounds. Sold to consumers between 50 and 80 the settlement depends on the premium paid, age and gender when the policy begins.
Ominously, no questions about their health are asked. Some policies stop after a certain amount of time, but are valid until the insurance holder dies. In other insurance plans the payment is made until the client passes away, however insurance holders may pay more in than they get out depending upon when they pass away.
Referring to advertisements for 50 plus from LV, Karl Simms of independent financial advisers Investment box says ‘I can’t understand Michael Parkinsonsanctioning this style of product. He is a quality act, but the same cannot be said for this policy.’
The Chairman of 50 plus from LV, Mark Combs defends Frost’s role, saying he is only making people conscious of the plans existence , for which there is substantial demand .He states, ‘The draw is their affordability because of their low premiums and the guaranteed acceptance process.’
Still, you could get an improved deal with a different insurer buying regular plan on equivalent terms ‘consumers could get three or four times as much for their money from an ordinary life plan, in return for replying to a few questions.’ Says George Meakins of Hillmont financial services.
Not asking any health questions forces much dearer fees as these policies attract clients with pre-existing illnesses who may die before the insurer has covered its cost. Companies also freeze any settlement for the first one or two years to protect themselves. A reimbursement of the payments made is more often than not refunded if a policyholder passes away of natural causes in this time.
The Manager of financial services at Direct Line, Jonathan Smith, admits that the price may be less for ordinary cheap life insurance cover but generally by the time you reach your 50’s, many have suffered some kind of ill health, consequently why consumers favour the over 50’s plans. Policyholders’paying in more than they ever get backis one area he doesn’t concur with. ‘When we put together our plan we decided to put a cap on the premiums,’ he states, meaning once the insurance holders have paid the sum assured their payments cease.
Most over-fifties plans do ultimately have cut off points, but many policyholders have paid more than they should before this time. Premiums usually cease at ninety with the LV plans and the post office running them for a set duration.
The main reason people purchase these policies is to pay burial costs. Yet, the eventual pay out may not be enough. A pre-payment policy could be a better alternative with Swan Hill and District Funerals supplying three packages costing between 2,699 pounds and 3,339 pounds. This particular type of plan can be taken out for 3 years.