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Over-fifties insurance
Special 'over-fifties' life assurance policies which are sold to people aged between 50 and 80
are becoming increasingly popular. These policies guarantee acceptance and policyholders will not be asked any medical questions unlike ordinary life insurance policies.
Ads for such over-fifties’ plans often feature 'mature' celebrities such as Sir Michael Parkinson and Cilla Black. But it seems that many people who take out these plans get trapped into paying much more than their families will ever get out.
The Insurance Company guarantees it will pay out a fixed sum on the policyholder's death to their beneficiaries in return for monthly premiums ranging from around £6 to £60. The monthly premiums are payable in some cases until the policyholder dies, although other plans' payments may stop after a certain time, but the policy will remain valid until the holder dies.
According to Mark Howes, Managing Director at Axa Sun Life Direct, defends Parkinson's role by stating: “The attraction of this policy is the affordability because of their low premiums and the guaranteed acceptance process”. “The other reason people like the policy are because they know exactly what they will pay” says Heidi Welch, Director of Direct Distribution at LV, which uses Cilla Black to 'create awareness' of its over-fifties policy.
But, Alan Lakey, an independent protection specialist at Highclere Financial Services is of opinion that people could get a better deal elsewhere on the same terms if they bought an ordinary policy.
Insurers risk attracting more people by not asking about health with pre-existing conditions. People could die before the Company has covered its costs. Hence, higher premiums have to be charged for over-fifties’ plans. If the policyholder dies of natural causes during this period, a refund of premiums is normally given instead.
The main reason for people to take them out may be to cover funeral expenses, but the eventual payout may not be enough. They would be better off with a pre-payment plan, ie. Co-operative Funeralcare, the UK's largest undertaker, offers three guaranteed funeral 'packages,' which can be paid for over a period of three years.
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| Home Contents Insurance |
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| When
it comes to household insurance, there are two kinds of
policy.
* Buildings insurance covers the structure of the home
itself, as well as the fixtures and fittings
* Contents insurance covers the contents you would take
if you moved.
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