DELICIOUS
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REDDITA huge number of both small and large friendly societies mushroomed in 19th century England – so that by the late 1800s there were some 27,000 of them.
Each one was dedicated to providing a means for ordinary people to put by a small amount of money into a wider mutual fund, they could withdraw those savings in times of financial need – most commonly, the expense of a decent burial.
In this way, the concept of life insurance as a form of funeral insurance was born.
Life insurance in the modern age
From those early beginnings, life insurance has grown ever more sophisticated, with a wide range of contemporary products, broadly divided into two main categories – term life insurance, which guarantees an assured cash benefit if you die before a certain date (or “term”) and whole of life insurance, which also guarantees a fixed cash benefit, but whenever it is that you die.
Over 50 life insurance
Over 50 life insurance occupies a special place amongst the whole of life insurance policies and retains what are probably the most faithful principles of the early friendly and mutual societies – a way of start your savings now for the inevitable expense of a funeral when you die.
Not only is this a way of reassuring yourself that financial help is going to be there to pay for the funeral you want, but it also relieves your surviving family and loved ones the burden of finding the money with which to pay for your funeral – at a time when funeral costs are escalating at a rate that outstrips the current rate of inflation.
As a way of helping to pay for your eventual funeral expenses, however over 50 life insurance offers a number of additional benefits:
— they offer a potentially very affordable way of saving for those expenses – some policies start at premiums costing less than £4 a month;
— provided you are over 50 years of age, your application for cover is automatically accepted, without the need for a medical – whatever your current state of health or lifestyle choices;
— although all policies have an initial waiting period from the date of commencement until full cover is assured, this might be as short as 12 months; and
— many providers offer a free gift, card or voucher, plus a fixed amount contribution to your eventual funeral costs.
If you are in good health, free of pre-existing medical conditions and happy to complete a detailed medical questionnaire, you might instead prefer to improve the level of benefits payable (by up to 40%) by choosing a standard whole of life insurance policy in place of an over 50 life insurance policy.
With either kind of whole of life insurance, however, you need to remember that premiums are payable for the remainder of your life (or, with some policies, until you reach the age of 90) and that if you miss payments or cancel the policy terminates, with no cash-in value.
You may also want to bear in mind the effects of inflation on the assured sum and remember that it may be worth less in real terms by the time of your death – perhaps leaving your relatives to foot the remainder of the bill for your funeral expenses.
Take into account, too, that because you are paying the premiums for what may be many years, the amount you have paid in may be more than the final cash settlement paid out.
