Life Insurance Over 50 – Types of Policies 

In the UK today there are many types of life insurance policy available. Some of the main types which are designed to protect you and your family are briefly described below.

Decreasing Term Life Insurance

Decreasing term life insurance provides a lump sum payment to the beneficiaries in the event of the insured dies or in some cases is diagnosed with a terminal disease.

The value of the cover decreases over the term of the policy. This can be represented with regards to an outstanding mortgage balance. For example, if the decreasing term life insurance policy is for the value of £120,000 taken over twenty years – in the second year it would pay out a large percentage or all of the £120,000 while in year sixteen it would only pay out around a quarter of the total amount. Over 50 Life Insurance

That is why it is called a “decreasing” amount of cover taken over a specific term.

Level Term Life Insurance

Level term life insurance pays out a lump sum to the beneficiaries of the policy when the insured dies or in some cases is diagnosed with a terminal disease.

The main difference between level term and decreasing term life insurance is that the lump sum amount due with a level policy does not reduce over time. This is greatly beneficial to people who want to provide a definite level of financial security to the family far beyond just paying off a mortgage.

Level term life insurance in general is more costly than decreasing term over the same period of time but will guarantee a superior value of protection.

Critical Illness Insurance

Critical Illness Insurance is designed to payout a lump sum to the insured upon being diagnosed with a serious illness. There are 2 main types of premiums you can choose from – fixed premium or reviewable premium.

At the time of purchase a fixed premium is more costly than reviewable premium but over time they often come out to be cheaper as reviewable premium may be cheaper at the time of purchase but then go up over time as health costs may increase. You may think of them as being alike mortgage with a fixed or variable interest rates.

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These definitions are for informational purposes only and do not represent recommendation nor are offered as advice in any form. Before committing to any financial arrangement you should consult an authorised financial adviser.