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Planning Retirement Online

The Advantages & Pitfalls
of Over 50s Cover

June 2011 

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Your reasons for buying over 50s insurance will be different from those who acquire an insurance plan as a vehicle for saving.

Over 50s cover is designed to purchase peace of mind for those who are concerned about their dependents or financial situation after their death. Paying for funeral expenses, continuing care for those who have been dependents and various other financial responsibilities can all be a source of anxiety unless preparations have been made in advance of an untimely death. In essence, over 50s insurance provides both peace of mind and practical financial resources at a stressful time for family and surviving loved ones.

Funeral expenses in the UK have more than tripled in recent years, but they do not take into account the other bills that can accumulate at this difficult time. In addition to the funeral itself, a burial plot, memorial and/or headstone can increase the total expense significantly, possibly presenting a financial hardship for surviving loved ones. A tailored insurance policy can address these expenses.

Providing care for the surviving dependent spouse or other dependents is also a serious consideration. If your savings portfolio looks uncertain, an over 50s insurance policy can guarantee a specific and immediate pay out in the event of your death. Knowing your loved ones will be well cared for and unburdened by still existing unpaid debts will assure peace of mind.

Unlike life cover insurance that often requires a medical examination, history and/or extensive questioning, the over 50s programme rarely involves any form of medical approval.
As a result, the pay-out is usually only collectible after a ‘waiting period’, which is generally two years beyond the time of purchase. The exception is the case of your accidental death during those first two years. Should health-related issues cause your death within 24 months of buying your policy, the most you can expect to recoup is the total of the premiums paid thus far. Otherwise, the policy is often extended for the remainder of your life.

An important advantage of the over 50s insurance plans is the fact that you do not have to worry about passing yearly physicals or medical examinations. Once you are accepted and locked into this programme, your premiums are frozen for the remainder of the policy. They will not be raised and your policy cannot be cancelled unless you fail to keep up your regular premium payments. If that should that happen you would not be entitled to any refund.

The purpose of over 50s insurance cover is to make one last final decision about your finances and caring for your loved ones while it is still in your power to do so. No one looks forward to aging - however, planning and preparing is the best, most compassionate way to face this inevitability.

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