Asda Over 50 Life Plan Review. UPDATE – these seem to have been withdrawn.
The Asda Over 50 plans are not funeral plans. Really, they are not. They are underwritten by LV= and have a link to Dignity Funeral Plans which give you a bonus if you use a Dignity Funeral Director. But funeral plans they are not.
Unlike many, Asda Over 50 plans insurance has only a 1 year survival period – most won’t pay out (more than a refund of premiums) unless you survive for 2 full years, though there is one plan which pays out after just 6 months. So that is one plus for the Asda plan.
The Asda plan is, like most Over 50 plans, very poorly suited for the job people think they are paying for, and we can’t see how the Regulators allow such poor value plans to be sold. The only way to “win” is to die early!
- You need to bear in mind that the cover is fixed, so inflation means it will buy less in the future
- Your plan will only pay out the premiums you’ve already paid in if a claim is made within the first 12 months.
- This isn’t a savings plan, so there is no cash-in value.
- If you cancel your policy at any time, you won’t get any money back
and there will be no claim when you pass away.
- With our uncapped option it is possible to pay in more than is paid out.
Here are our comments (in italics) on the Asda Over 50 Plan sales pitch:
1) Consider how much you want to be paid out and of course how much you want to pay monthly. It’s also worth thinking about inflation – which will reduce the buying of the sum of money you leave behind.
Here, Asda seem to be confirming a major disadvantage of most over 50’s plans – even if you take out adequate insurance to start with, inflation will soon make it inadequate. Remember that funeral inflation is currently running at 3 times the rate of normal inflation, so the real value of your Asda Over 50’s plan could be more than halved in just 8 years at current funeral inflation rates. So your family pick up the balance of the cost.
2) You may want to cap your payments so you never pay in more than is paid out. Choosing not to cap your premiums could mean you end up paying in more than is paid out when you pass away.
Capped payments as a feature – really that takes the biscuit – see below. Capped premiums are more expensive.
3) Payments from this plan usually go to your estate. So it’s worth thinking how inheritance tax might affect your payments.
That’s simple – it could knock 40% off them and delay the payout for 6 to 12 months which really entirely defeats the aim of the plan to pay for the funeral!!!!!!!! Lunacy.
4) There’s no cash-in value with this plan. So if you cancel your plan you won’t get back any of your premiums and any beneficiaries won’t get a cash lump sum when you die.
And you are still considering buying an Over 50’s plan? Really? If you run out of money to pay the premiums, you will lose every penny – unless you go for the capped option, where after you have paid them the full cost of the death benefit, they agree (so generous!) to give you money back to you – without interest – when you die. So you have made Asda an interest free loan, and in their generosity, they promise to give it back to your estate when you die.
5) If you pass away within 12 months of your plan starting, it may only pay out the premiums you’ve paid in.
No, it WILL pay out only the money you have paid in if you die in the first 12 months! Prepaid funeral plans are much better if you can possibly stretch to one.
6) If you assign your plan to Dignity, we will add £300 to the benefit.
Our research shows that Dignity funeral directors are often much more expensive than independent local funeral directors, so the “extra” £300 could result in a much bigger bill for those left behind.
Our review of the Asda Over 50 Plan Life Cover.
We really don’t like Over 50’s Plans, and the Asda Over 50 Plan has good and bad features, but Over 50’s Plans should always be a last resort. There are nearly always better ways of prepaying a funeral. If you are keen to get a funeral plan in place, give us a call on 0800 0588 240. If you are not in a hurry, just download the general funeral plan fact find form – it will help you consider the options – and return it when you are ready to move forward.
Asda Over 50 Plan
Apparently, these offer the same LV plan: Readers Digest, RAC, Standard
Life and Great Deal.