I bought an over 50s life policy thinking it was a funeral plan

I bought an over 50s life policy thinking it was a funeral plan. What should I do?

An “Over 50s life policy” is a perfectly valid form of insurance.   The only trouble is that the “non profit whole of life policy” which forms the basis for most of them is totally unsuited for the role many people buy it for. It will, in most cases, NOT pay for your funeral for the reasons below..

That comes as a shock to many, who have not though about the subtle nature of much of the advertising, nor have they read the health warnings.

Some of the disadvantages:

  • 1) Miss more than a couple of payments (say when you are ill in hospital) and your policy will normally be cancelled and you will get NOTHING back.
  • 2) As funeral costs increase (49% or so over the last 5 years) the value of your policy shrinks. Maybe if you take out a really large on or die just after the non payout period it will.
  • 3) In most cases you will have to continue paying until you are at least 85, and you could end up paying in more than you get out.
  • 4) Worse still, the family may not have access to the life insurance until probate has been granted, which may be many months later.

So should I cancel my Over 50s policy?

We think the Regulators should be ashamed of themselves for trashing the decent policies which used to be available. We don’t think non profit whole of life policies should be allowed, for the simple reason that the public just do not understand what they are as they read what they want to read not what the adverts say.

That said, you will get nothing back if you cancel a non profit whole of life policy. That is probably fine if you have only just taken it out, but not so good if you have been paying into it for years and perhaps are poorly.

So what our members might well suggest is a “part” funeral plan which pays for the funeral directors services, but does not allow for the third party costs such as cremation, doctors fee or clergy. You would be surprised how many people (again) don’t read the small print and buy these as a proper funeral plan not a part plan!

Use the navigation bar at the top to find one of our members in your local area and they will be happy to discuss how to bee up your over 50s life policy.