Joint Over 50s Life Insurance UK

As we navigate life beyond the age of 50, our financial priorities often shift. The mortgage may be shrinking, the children may have flown the nest, but new considerations emerge. One of the most common is the desire to leave a financial legacy, or simply to ensure that our final expenses don't become a burden on our loved ones. For couples, this conversation often happens together.

This leads many to explore Over 50s life insurance – a product known for its simplicity and guaranteed acceptance. But what happens when couples look to buy this cover together? Is there such a thing as a "joint" Over 50s plan, and is it the right choice?

This comprehensive guide will demystify the world of Over 50s life insurance for couples in the UK. We'll explore how these policies work, weigh the pros and cons, compare them to other options, and provide you with the expert insights needed to make an informed decision for your shared future.

When couples choose guaranteed acceptance policies together

Choosing a life insurance policy is a significant decision, and for couples, it’s one that’s best made with a shared understanding. When it comes to Over 50s life cover, the term "joint policy" can be slightly misleading. Unlike traditional life insurance, where a single 'joint life, first death' policy covering two people is common, Over 50s plans typically work differently.

In most cases, when a couple applies for Over 50s cover, they are not buying a single joint policy. Instead, they are purchasing two separate, individual policies.

Why is this the case? The structure of Over 50s plans, with their guaranteed acceptance and fixed payouts, is built around an individual's age and premium. Insurers find it simpler and more actuarially sound to issue two distinct plans. However, many providers recognise the value of couples applying together and often incentivise it with a discount on the premiums or a gift card upon commencement.

This "two-policy" approach has a significant advantage: it results in two separate payouts. When the first partner passes away, their policy pays out to the beneficiary (often the surviving partner). The surviving partner’s policy remains active, and upon their death, it will also provide a full payout to their chosen beneficiary (perhaps their children or estate). This provides a double layer of financial support, which a traditional 'first death' policy would not.

Understanding Over 50s Life Insurance: The Basics

Before diving deeper into the specifics for couples, it's essential to grasp the fundamental features of a standard Over 50s life insurance plan. These policies are a specific type of whole-of-life insurance designed to be accessible and straightforward.

Here are the defining characteristics:

• Guaranteed Acceptance: For UK residents aged between 50 and 80 (or sometimes 85), acceptance is guaranteed. There are no medical questionnaires to fill out and no need for a doctor's examination. This is the product's primary appeal, especially for those with pre-existing health conditions that could make other types of insurance expensive or unattainable.
• Fixed Premiums: The monthly premium you agree to at the start of the policy will never change. Whether you pay £15 or £50 a month, that amount is fixed for the life of the policy, making it easy to budget for.
• Fixed Cash Payout: The policy pays out a fixed, tax-free lump sum upon your death. The size of this payout (the 'sum assured') is determined by your age when you take out the policy, your monthly premium, and sometimes your smoking status.
• The Initial Waiting Period: This is a crucial feature. Over 50s policies have an initial "waiting" or "deferment" period, typically lasting 12 or 24 months. If you pass away from natural causes during this time, the full cash sum is not paid. Instead, the insurer will refund all the premiums you have paid, often with an additional 50% on top. However, if death is the result of an accident, most policies will pay the full sum assured, even within this initial period.
• Whole-of-Life Cover: Once you are past the initial waiting period, the cover lasts for the rest of your life, provided you continue to pay your premiums.

"Joint" Over 50s Policies: How Do They Actually Work?

As we've touched upon, true "joint" Over 50s policies are a rarity. The standard market practice is for a couple to take out two individual plans simultaneously.

Let's clarify the distinction with a simple comparison.

The overwhelming advantage of the two-policy approach for Over 50s cover is the dual payout. It ensures that when one partner dies, the survivor receives a lump sum to help with immediate costs. Then, when the second partner passes, a further lump sum is available to be passed on to children or to cover their own final expenses.

The Pros and Cons of Taking Out Over 50s Cover as a Couple

Making this decision together requires a balanced look at the benefits and drawbacks.

The Advantages

• Financial Security for Both: It provides peace of mind that there will be a cash sum available no matter who passes away first. This can help the surviving spouse manage funeral costs, settle small outstanding bills, or simply provide a financial cushion during a difficult time.
• Guaranteed Acceptance for Both Partners: This is invaluable if one or both partners have health issues. It removes the stress and uncertainty of medical underwriting and guarantees that both can secure cover.
• Potential for Discounts: Many insurers offer a small discount or a one-off gift (like a voucher) when two people from the same household sign up together. While not a huge saving, it's a welcome incentive.
• Simplicity and Budgeting: Applying together simplifies the process. With fixed premiums for both policies, couples can easily factor the total cost into their monthly budget without worrying about future increases.

The Disadvantages

• The Cost vs. Payout Risk: This is the most significant drawback of any Over 50s plan. Because the payout is fixed, a healthy individual who takes out a policy at 50 and lives to 95 could end up paying more in total premiums than the policy will pay out. Couples need to be aware of this possibility for both policies.
• Inflation Erodes Value: A £10,000 payout might seem sufficient today, but its purchasing power will be significantly less in 20 or 30 years. The fixed lump sum does not increase with inflation.
• The Waiting Period: The 12 or 24-month waiting period applies to both individual policies. If either partner were to die of natural causes during this time, their policy would only refund the premiums paid.
• Limited Payout Amount: Over 50s plans are designed for smaller sums, typically to cover funerals or leave a small gift. The maximum payout is often capped around £20,000, depending on your age and premium. They are not suitable for covering large debts like an outstanding mortgage.

Is an Over 50s Plan the Right Choice for You and Your Partner?

The suitability of this type of cover depends entirely on your personal circumstances, health, and financial goals.

An Over 50s Plan for a Couple Could Be a Great Fit If:

• You have pre-existing health conditions. If either you or your partner has a medical history (such as diabetes, heart conditions, or cancer) that would make fully medically underwritten insurance very expensive or lead to an application being declined, the guaranteed acceptance of an Over 50s plan is a major benefit.
• Your primary goal is to cover funeral costs. The average cost of a basic funeral in the UK is now over £4,000, according to the SunLife Cost of Dying Report 2024. Two policies can ensure funds are available to cover these expenses for both partners without dipping into savings.
• You want to leave a small, guaranteed cash gift to children or grandchildren.
• You value simplicity and want to avoid medical questions and examinations.

You and Your Partner Should Explore Other Options If:

• You are both in good health. If you are non-smokers in your 50s with no major health concerns, you could likely get a far larger amount of cover for a similar monthly premium with a medically underwritten Whole-of-Life or Term Life Insurance policy.
• You need to cover a large liability, such as an interest-only mortgage or provide a substantial inheritance. The limited payouts from Over 50s plans won't be sufficient for this.
• You are concerned about the impact of inflation on a fixed cash sum.
• You are still working and are more concerned about loss of income. In this case, products like Income Protection or Critical Illness Cover may be more appropriate.

At WeCovr, we help couples navigate these choices every day. Our expert advisors can compare quotes from across the market for both Over 50s plans and medically underwritten policies, giving you a clear picture of what represents the best value for your specific situation.

A Tale of Two Couples: Real-Life Scenarios

To illustrate how these choices play out, let's consider two different couples.

Scenario 1: Brian and Sheila, both aged 64

Brian had a stent fitted after a heart attack six years ago, and Sheila manages Type 2 diabetes. They have paid off their mortgage and have some savings, but they worry about their children having to pay for their funerals. They tried to get standard life insurance but found the premiums were extremely high due to their health histories.

• Solution: They decide to take out two separate Over 50s policies. For a combined premium of £60 per month (£30 each), they each secure a guaranteed payout of approximately £4,500. This gives them peace of mind, knowing their funeral costs are covered. The guaranteed acceptance was the key factor in their decision.

Scenario 2: David and Mary, both aged 53

David and Mary are both in excellent health, are non-smokers, and have active lifestyles. They have a £50,000 interest-only mortgage with 12 years remaining. Their goal is to ensure the mortgage is paid off if one of them dies. They initially look at Over 50s plans.

• Analysis: For a £30 monthly premium each, they might get an Over 50s payout of around £8,000 each. This is nowhere near enough to cover their mortgage.
• Better Solution: After speaking with a broker, they apply for a joint life, first death term assurance policy. Because they are healthy, they are able to secure £50,000 of decreasing cover over a 12-year term for a combined premium of around £20 per month. This policy is perfectly matched to their primary need.

These scenarios highlight why there is no "one-size-fits-all" answer. The right choice depends on your health and your financial objectives.

Comparing Costs: What Can You Expect to Pay?

The cash payout on an Over 50s plan is calculated based on three main factors:

1. Your Age: The older you are when you start, the lower the payout for the same premium.
2. Your Monthly Premium: The more you pay per month, the higher the payout.
3. Your Smoking Status: Smokers will receive a lower payout than non-smokers for the same premium.

The table below gives an illustration of the potential cash payout for a non-smoker for one individual policy. Remember, as a couple, you would each have your own policy.

Disclaimer: These figures are for illustrative purposes only and are not a quote. The actual sum assured will vary between insurers. Last updated September 2024.

When applying as a couple, ask about discounts. Some insurers might offer a 5% or 10% discount on both policies, which can add up to a significant saving over the lifetime of the plans.

The Financial Small Print: Key Details Couples Must Understand

When considering any financial product, the details matter. Here are some critical points for couples to discuss.

• The Waiting Period: Understand exactly how long the waiting period is (12 or 24 months) and what it means for both of you. Accidental death is usually covered from day one, but death from illness is not.
• The Risk of Paying More In: Have an open conversation about longevity. If you both live well into your 90s, it's highly likely you will pay more in premiums than the final payout. Some modern policies address this with a "premium cap."
• Premium Capping: Look for policies that stop taking premiums at a certain age (e.g., 90) or after a set number of years. With these plans, your payments cease, but your cover remains in place for the rest of your life. This is a hugely valuable feature that prevents you from paying more in than the sum assured.
• Placing Your Policy in Trust: This is perhaps the single most important piece of practical advice. By writing your Over 50s policies into Trust, you can ensure the payout goes directly to your chosen beneficiaries without delay. It bypasses the lengthy process of probate and ensures the money is not considered part of your estate for Inheritance Tax (IHT) purposes. Most insurers offer a simple Trust form, and an expert adviser can help you complete it correctly.

Beyond Over 50s Plans: Exploring Alternative Protection for Couples

While Over 50s plans have their place, it's crucial for couples to know what other options are available. An expert broker can be invaluable here, providing a holistic view of the protection market.

Here are some key alternatives:

For business owners and company directors, solutions like Executive Income Protection and Key Person Insurance offer powerful, tax-efficient ways to protect both personal and business finances, a topic we at WeCovr are highly experienced in advising on.

The Role of an Expert Broker in Navigating Your Options

With so many products and providers, the UK insurance market can feel overwhelming. This is where an independent broker like WeCovr provides immense value.

Instead of going directly to one insurer and only seeing their product, we compare the entire market for you. We can:

• Assess Your Needs: We take the time to understand your joint goals, health profile, and budget.
• Compare All Options: We'll run comparisons for Over 50s plans, term insurance, and whole-of-life cover, showing you the real-world cost and benefit of each.
• Identify the Best Value: We can pinpoint which insurers offer the best terms, such as couples' discounts, premium capping, and generous accidental death definitions.
• Assist with Trusts: We guide you through the process of placing your policies in Trust, ensuring your beneficiaries receive the money quickly and efficiently.

Furthermore, we believe in supporting our clients' overall wellbeing. That's why WeCovr provides complimentary access to CalorieHero, our AI-powered calorie and nutrition tracking app. It's our way of going the extra mile, helping you and your partner build and maintain the healthy habits that contribute to a long and happy life together.

Healthy Living for a Longer, Happier Life Together

While insurance provides financial peace of mind, the ultimate goal is to enjoy a long and healthy life with your partner. As we age, focusing on wellness becomes more important than ever.

• A Balanced Diet: Focus on a diet rich in fruits, vegetables, lean proteins, and whole grains. Staying hydrated and moderating alcohol and processed food intake can have a huge impact on energy levels and long-term health.
• Stay Active Together: Regular physical activity is crucial for cardiovascular health, mobility, and mental wellbeing. This doesn't have to mean running marathons. Daily walks, swimming, cycling, dancing, or bowls are all fantastic ways to stay active as a couple.
• Prioritise Sleep: Aim for 7-8 hours of quality sleep per night. Good sleep is vital for cognitive function, immune response, and physical recovery.
• Nurture Your Mental and Social Health: Maintain social connections, engage in hobbies you both enjoy, and support each other's mental wellbeing. A strong partnership is one of the best buffers against the stresses of life.

Final Thoughts

For many couples over 50 in the UK, taking out two separate Over 50s life insurance policies can be a smart and simple way to provide for each other and cover final expenses. The guaranteed acceptance is a powerful feature for those with health concerns, and the dual-payout structure ensures both partners are provided for.

However, it is not a universal solution. Healthy couples or those with larger financial protection needs may find far better value in medically underwritten alternatives.

The key is to make an informed choice together. Discuss your goals, understand the pros and cons, and don't hesitate to seek independent, expert advice. By doing so, you can put a plan in place that provides true peace of mind, allowing you to focus on what really matters: enjoying your life together.