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Inflation causes over 50s to cancel life insurance

It’s not been easy living in the UK recently and many households have sadly struggled with rising prices for important monthly outgoings like heat, food and electricity.

As the cost of living rises higher and higher in the UK, many over 50s are cutting out extra expenses, their life insurance policies included. Insurance provider Scottish Friendly surveyed over 1,000 customers and found that 22% were thinking about cancelling their cover.

What is over 50s life insurance?

Over-50s life insurance plans are special life insurance policies designed specifically for those who are 50+. Insurance providers will offer guaranteed acceptance cover, meaning you can get the cover you need to protect your loved ones with no medical questions.

You will usually take out an over 50s policy when you are in between the ages of 50 and 80 years old. This will then pay out a cash lump sum to your family or any other beneficiary you choose.

Over 50 life insurance policies are mainly designed to help your loved ones to cover funeral costs. Some people may also choose to have a small amount of money left behind to help pay off their mortgage or leave a small cash gift.

The fact is as we age, we are more likely to develop health issues. Life insurance will generally increase in price because of this, which is why we always recommend getting cover as early in life as possible.

Over 50s life insurance can be a good option for anyone over the age of 50 who may otherwise find it hard to get the policy they need at a fair price. Guaranteed cover also provides peace of mind, as your loved ones are guaranteed to receive a payout from your policy when you pass away.

You also can benefit from:

  • Low monthly payments
  • Fixed monthly premiums (price never changes)

More about OVER 50s LIFE INSURANCE.

Why is inflation affecting life insurance for over 50s?

Inflation continues to affect household budgets in the UK, with many people finding it difficult to afford important monthly bills.

Inflation refers to the price of products and services in the UK, with high prices equalling high levels of inflation. The rate of inflation has increased in the UK to 10.4%, though it is expected to fall by the end of 2023.

With raised prices everywhere you turn, people on lower or fixed incomes (including those who are retired) have been finding it harder to afford their bills.

Life insurance itself isn’t increasing in price and your cover shouldn’t increase in price after it is in place anyway. But it is clear that many people (particularly those over 50) are debating if their cover is worth the price they pay each month.

There are support schemes in place to help people who are struggling in the cost of living crisis. Here are some of our recent blogs and resources below:

You can also check resources on the government website and helpful sites for more advice. We have listed some of the most helpful links below for you:

More about LIFE INSURANCE.

Should you cancel over 50s life insurance?

28% of women and 17% of men surveyed by Scottish Friendly have stated they are considering cancelling their over 50s life insurance policy, but is this really a good idea?

It is natural to want to cut out extra costs to help stretch your monthly budget. While life insurance may not seem necessary short term, you should think carefully before cancelling your life insurance cover.

Life insurance is designed to offer financial support to your family after you are gone. Without this financial safety net, your loved ones may struggle with costs such as:

  • Funeral expenses (57% surveyed by Scottish Friendly stated this is why they took out cover)
  • Mortgage repayments (9% surveyed by Scottish Friendly stated this is why they took out cover)
  • Household bills
  • Repaying debts
  • And more…

Of course, the decision is in your hands, but it is important to be aware of a few key facts before cancelling your policy.

  • Your cover will likely be more expensive if you apply again in a few years, due to being older than when you applied for your current policy.
  • If you stop paying into your over 50s policy, you will lose the money you have already paid with no access to the benefit.

There are also other ways to reduce the cost of your life insurance without having to cancel the cover altogether. You could:

  • Reduce the level of cover (the amount of £s you are covered for)
  • Switch your policy to a new provider (if you can find one with a lower price)

Our life insurance EXPERTS are always on hand to offer FREE and helpful advice about your policy. We can look at how much you are paying and the cover you need to help you work out the BEST way to save.

Useful resources

Office for National Statistics – Inflation and price indices

House of Commons Library (UK Parliament) – Rising cost of living in the UK

Bank of England – Inflation calculator

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