Just because you are retired does not mean you suddenly stop paying bills or have home expenses reduced, as you now maybe at home more, as you have time on your hands.
What life insurance may you have lost at Retirement ? You may have lost your employers death in service cover. You may have finished your mortgage & so cancelled your mortgage life insurance. The children have all left home, so your family life insurance plans have now also ended.
What to do then about your life insurance requirements in Retirement, especially if surviving on pensions, maybe on Grandparents duties now instead & say if you live another 20+years ?
Is the life insurance policy in retirement just to cover funeral costs ie; smaller plan - or is it meant to help toward a partner's ongoing everyday bills & expenses ie; a large plan ?
WHAT TYPES OF LIFE INSURANCE ARE AVAILABLE AT RETIREMENT ?
Term life insurance is the simplest and cheapest type of Life Cover.
It is known as term assurance because you choose the term ie; how long you're covered for - usually say 10 or 20 years (the term) up to age 85-90 for many Uk Insurers.
Term life assurance only pays out if you die within the term you've agreed in retirement. If you live longer than the term, you get nothing. As a couple, you can also take out a joint Life Insurance in both your names, with the policy paying out on 1'st death ie; if either of you die during the term.
Also consider how large the term life cover you need if this is not covering say just a debt like a mortgage or loan. Common practise is 10 x salary.
Things to look out for if requesting this type of Advice ...What type of new in retirement Life Insurance Cover policy do you want? For example
Increasing lifecover policy (where cover and premium rise over the years)
2 x single life insurance cover plans or a joint life assurance cover policy
Guaranteed (where life insurance premiums stay the same throughout the term)
Reviewable premiums (where life cover premiums may go up every year or 5 years gone up at a review)
Whole Life Insurance Cover - in Retirement
Whole Life Insurance - A protection cover plan that via definition, as the name implies, is insurance guaranteed for the whole of your life, whenever you die. Whole Life Cover is traditionally more popular with those looking for life cover in retirement than necessarly term insurance, which as mentioned only pays out if you die during the policy term. You may find if this plan was intended as a funeral insurance policy, it is better to take out 2 separate life policies instead.
- Designed to pay out on death - whenever it occurs
- Benefits are currently paid out tax free on claim
- Whole Life Assurance Cover may be level or inflation linked
- Medical evidence may be required and a medical examination for those with health issues
- No Medical Over 50's lifecover plans may usually have 1/2 year waiting period before benefits are fully paid
- Premiums may be guaranteed or if investment based reviewable
- Maybe payable on death or earlier Terminal Illness
- Benefits can be set up to be payable into Trust
- Can be set up on sole or joint life basis
Whole Life insurance in retirement policies are designed to always pays out upon your death, so logically are more expensive than term life insurance plan as the risk is greater to the Insurers. Whole Life insurance Comparison price wise are therefore more expensive because it is certain that the life company will eventually have to pay the life sum insured.
Whole Life Assurance cover plans: Investment based versus Guaranteed premiums
At Retirement Life Assurance - Investment Based Premiums
Your whole of life premiums are invested into a fund to cover the cost of whole life insurance rates. Potentially if surrendered this plan may aquire a value.
This type of cover aims to balance the level of life cover with adequate investment to support the protection in later years and thus try maintain the original premium throughout life. This relies on the value of units invested in the underlying fund growing at a certain level each year. Poor fund performance or Increased fund charges could result in the premiums being inadequate and may have to be increased to maintain the same level of cover at review.
The initial premiums and the sum insured are designed not to increase for the first 10 years. After this initial period the plan is reviewed and if necessary the whole life plan premiums may be increased.
Note: We do not give advice or do investment based whole life insurance online quotes. We can refer you to a suitable quaified broker from Sesame if you need help with this type of whole life products.
At Retirement Life Insurance - Non-Investment Based ~ Guaranteed Premiums
This type of whole of life insurance policy, as the name implies, has guaranteed premiums that are not investment based; they are generally none-reviewable premiums. These premium therefore stay the same throughout the plan but unlike the investment based cover above, have no surrender value. It can be set up on a single or joint life basis. The life insurance in retirement can be level or also index linked.
Whole of Life Assurance - Uk premiums will depend on the following: sum to be insured, your age, your health, your sex and whether you smoke or not. A non smoker is usually defined as someone who has not smoked for at least 12 months or taken nictotine replacement products. Premiums for women were generally lower as on average they tend to live longer but this changed from 12/12 with gender neutral rates.
Check the quotes & Key Facts documents for your whole life quotation produced.
Trusts: Should my Life Insurance Policy At Retirement be set up in a trust?
Trusts can help avoid delays in money going to dependents but should not displace the importance of making a will. However, it can potentially avoid the risk of having to pay inheritance tax [whose rules change with each successive government]. The terms and conditions of Whole of Life Insurance policies trusts vary, so make sure you understand the scope of the trust being offered before committing yourself & seeking independant legal advice if necessary.
Do you want Advice in 2018 on Life Insurance Cover At Retirement?
After looking through this article if you would like advice on Life Insurance, complete our life assurance quotation enquiry form & we will contact you to discuss your life insurance and protection needs.