Over 50 Insurances: Fit For Purpose?

Are all Over 50 Insurances Rubbish?

It all depends on what you think you are buying.

Are all Over 50 Insurances Rubbish?

Funeral Plan Quotes

PROPER Funeral Plan Quotes

Pretty much if you want expect to pay for a funeral plan with one.   Most of the million or so people who have bought them in the find belief that they will pay for a funeral haven’t read the small print, which generally says:

  • The death benefit is FIXED: funeral costs are rising at 7% a year.  This means that if you take out a plan to pay for a £3,000 funeral today, the funeral would cost £5,901 at that rate of inflation in ten years.  That means your relatives will be left to find £2,901 – almost half the cost.  With a proper prepaid funeral plan, that wouldn’t happen.    After 20 years, your funeral would cost £11,609 at the same inflation rate.  Your Over 50s plan would still pay out £3,000 leaving an bill of £8,609.  Still like the idea of Over 50s Plans?
  • If you miss more than one contribution to your Over 50 Insurance, they will cancel it and keep every penny you have paid in.

    funeral plan best buy

    Funeral plan best buy?

So Over 50s Plans are unsuitable in many cases – what can I do?

There are two things you can do:

  1. If the Over 50s Plan has been in place for many years.

Then we would suggest you consider taking out a proper prepaid funeral plan to add to your preparations: but a really basic one if you want to keep costs down.  That will at least narrow the gap when you die, and maybe even leave a bit left over for a party!  Proper prepaid funeral plans can be paid for over up to 10 years.  But if you can’t afford that…

or

2.  Buy a proper prepaid funeral plan and throw away what you have put into the Over 50s Plan if it doesn’t look like ever offering decent value.  Work out how many years to would expect to live , work out how much it would cost you and how much it would pay out.  But do remember that the insurance may pay the full amount even if you died tomorrow,  so over 50s plans do have advantages! As long as you are past the non-payment period, of course.

or

3.  Take out a proper Over 50s FUNERAL Plan on instalments. The fixed cost can be less than £1 a day though this does rise substantially if you take one out when you are older. Some of these plans doc actually guarantee to pay for your funeral. And we know which ones…   If you are keen to get things moving, please call us on 01323 740844, if not just download our prepaid funeral plan questionnaire and return it when the time is right – at least it will help you understand some of the issues.

A footnote on over 50s plans.   Why do they exist?

Surprisingly, the answer is that the Financial Services Industry is regulated by idiots who seem determined to make sure that only the wealthy are allowed to have proper advice. But pray that they don’t get too involved, as they would just make things worse.  Over 50s plans are a loophole in the regulations: because there is no cash value at any time, they are not regulated so anyone can sell them and the advertising is less tightly controlled.   But I guess that is better than regulating funeral plans out of existence.  In the good old days you used to be able to buy pretty good life insurance plans which stood a good chance of paying enough for a funeral, as they grew in value pretty much every year.  But the regulators made it uneconomic for anyone to sell them (£500 worth of regulation for a £60 commission just didn’t make commercial sense) and then they messed up the whole with profits market.  So pray that they don’t get any more involved in funeral plans, or they will vanish too!

Are all Over 50 Insurances Rubbish?