Over 50’s Life Cover

If you are aged 50 or over you may be thinking about the importance of your Life, Trauma, TPD or Income Protection policy. You may be in a situation where you have no or minimal debts, are beginning to transition to retirement and your children are older and no longer financially dependent.

However personal insurance policies can still play a vital role in your life, particularly if you want to ensure your funeral, mortgage and other debts can be paid for and you remain protected from critical illness, disablement as well as death.

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Why over 50’s still need cover

Chances are by the time you reach the age of 50, you will still have debts, your children will still be living at home and be financially dependent and you may have a spouse or partner who is also financially dependent on you.

This, coupled with the increased likelihood of suffering from a serious illness, fall and death as you get older are two very important reasons why cover is still necessary.

Over 50’s Statistics

  • In 2002-04, 20% of all deaths in those over the age of 50 was caused by ischemic heart disease
  • Cerebrovascular Disease (stroke) accounted for 10% of all deaths for those aged over 50 in 2002-2004
  • Cancer accounted for 29% of all deaths for those aged over 50 in 2002-04

Life Insurance for Over 50’s

Life Insurance may still be very important for those older than 50, especially if one still has a mortgage, other debts or financial dependents. However if your mortgage and other debts has been reduced and your children may not be financially dependent for much longer, you may want to reduce your level of cover to suit your present circumstances.

Top Policy Options for Over 50:

As you get older and you are on Stepped Premiums, you may find that your insurance premiums are increasing as your risk to the insurer increases.

If your cover is becoming too expensive for you to maintain, you have a number of options:

  • Premium Freeze: You can freeze your premiums for up to 12 month so they do not increase as you get older. If you freeze your premiums, your level of cover will also reduce.
  • Indexation: Each year, life insurers will increase your level of cover by the increase in CPI or a set percentage. This will also lead to an increase in your premiums. However you can opt out of this increase if you wish if you contact your adviser before the increase is placed on your policy, which usually occurs on the policy anniversary.
  • Reducing your cover: You can reduce your level of cover to make it more suitable for your circumstances. This may be particularly relevant if your mortgage or obligations have has been reduced.
  • Switch to level premiums: If you reduce your level of cover, you may find that level premiums are more affordable as they won’t increase for the next 15 – 20 years (generally premiums covert to Stepped Premiums at the age of 65 or 70).
  • Premium Suspension: If cover is simply becoming too expensive for you, you can generally opt to suspend your cover (rather than cancelling altogether) for up to 12 months due to a number of reasons including unemployment and financial hardship.

Income Protection for Over 50’s

Even as you move into your 50’s, you may still be working full time or at least part time and you and your family may still be dependent on your income. If you have a mortgage or rent payments, debts such as car leases and credit cards plus your normal daily living expenses, losing your income for a period of time is not an option.

Entry and Expiry Ages:

Income Protection entry age is generally up to the age of 60 or 64 depending on your occupation so it is still able to be taken out in your 50’s.

Depending on your occupation, expiry ages are generally 65 or 70, allowing you to stay protected well into your 50’s and beyond if necessary.

Important Income Protection Benefits for over 50’s

  • Benefit periods to Age 60, 65 or 70: Insurers generally offer benefit periods which are age based and not years based. This means if you suffer a long term injury and are unable to return to work for a number of years, you can still receive your benefit well after you turn 50.
  • Increasing Claims Option: Your monthly benefit will increase by CPI or a set percentage each year so your monthly benefit increases in line with inflation while you are on claim.
  • Superannuation Booster: Allows you to keep saving for your retirement by insuring an additional 5% – 10% of your income to go towards your superannuation.

Trauma Insurance

They say nothing is more important than your health and even if your mortgage is paid off, your kids are no longer at home and you are retired or approaching retirement, critical illness can still affect you. As you age, your risk of illness increases which makes trauma insurance perhaps one of the most important policies you can have.

Entry and Expiry Ages

Trauma Insurance is generally able to be taken out between the ages of 16 to 64, allowing you to take out cover well into your 50’s.

Rather than expiring, trauma policies generally convert at the age of 65 or 70 to a Modified TPD policy, providing you with cover for loss of limbs or sight as well as cognitive loss. You will need to determine if you need this type of policy going into your 50’s and beyond.

The Modified TPD policy will generally expire at the age of 100.

The Statistics:

  • Over 50% of all new breast cancer cases diagnosed in 2008-09 were in women over the age of 50.
  • The chances of being diagnosed with prostate cancer increase from 1 in 1000 for a man in his 40’s to 12 in 1000 for a man in his 50’s.
  • High blood pressure, one of the risk factors of cardiovascular disease and stroke, is the most common of diseases which affects the circulatory system.
    • Portions of Australians with high blood pressure by age:
      • 45 – 54: 26.0%
      • 55 – 65: 30.4%
      • 65 – 74: 38.7&
  • High cholesterol is the second most common risk factor to cardiovascular disease and is also one of the leading causes of stroke, is most prevalent in those aged 55 – 64 with 44.7% of Australians affected.

Important Trauma Insurance Benefits for Over 50’s:

  • Trauma Reinstatement: You can re-purchase your trauma insurance benefit 12 months after your initial trauma claim, allowing you to maintain cover, especially as your risk increases. The re-instated cover will not include cover for the condition you previously claimed for.
  • Trauma Plus: Provides a partial benefit for additional lesser critical illnesses such as carcinoma in situ of the breast, carcinoma in situ of the ovary, carcinoma in situ of the prostate, early stage prostate cancer, partial blindness, severe osteoporosis and more.
  • Life Cover Buy Back: If you have a combined policy that includes trauma and life insurance and you receive a trauma benefit, reducing your life cover benefit, you can buy back the reduced portion of life cover and restore life insurance to its full benefit.
  • Reducing cover: You can always elect to reduce your level of cover, particularly if it is becoming too expensive. Trauma Insurance will generally increase as you enter your 50’s as your risk of suffering from a critical illness increases.

Total and Permanent Disablement Insurance

As we get older our risk of suffering an injury due to an accident increases as our mobility, balance, vision and other functions decreases. Unfortunately sometimes these injuries can be so severe they leave us totally and permanently disabled and in many cases unable to work.

Even in your 50’s being unable to work may not be something that you and your family can cope with financially, especially with the likelihood of increased medical bills due to your condition.

A TPD Policy can ensure you remain financially protected should the worst happen as you go into your 50’s and 60’s.

Entry, Expiry and Conversion Ages:

TPD Insurance can generally be taken out between the ages of 16 and 75, allowing you to still take out cover into your 50’s if you choose to do so.

At the age of 60, 65 or 70, your policy will convert to a policy with the Modified TPD Definition, allowing you to maintain cover beyond the age of 65. This policy will generally expire at the age of 100.

Top TPD Benefits for Over 50’s

  • Combined Policy: You can combine your TPD Policy with your Life and/or Trauma Policy, reducing your premiums. This may be particuarly helpful if you want to maintain cover but find the premiums for your individual policies are becoming unaffordable.
  • Cover available worldwide 24/7 if you plan on travelling

Funeral Insurance

The Funeral Insurance benefit, generally up to $30,000, may be an alternative to a full life insurance policy if you need cover and cannot obtain affordable life insurance.

Entry and Expiry Ages:

Funeral Insurance can generally be taken out between the ages of 17 and 80 with an expiry age of 100, allowing you to maintain cover well into your later years.

Top Benefits for Over 50’s

  • No medicals required
  • Guaranteed acceptance between the ages of 17 – 80
  • Worldwide 24/7 Cover

If you are over the age of 50 and would like to compare policies, contact us today for a free comparison report!

Published: October 7, 2013
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Ask an Expert?

2 Comments

  • Susan Sarmardin |

    My father who born 26/9/1951 would like a life and funeral insurance cover or what would be the best cover. he is on centrelink benefits and has dementia.

    • Brett Lenertz SPECIALIST
      Brett Lenertz |

      Thanks for reaching out to us Susan. At age 65 your father has both options available. Generally with Life Insurance you are looking at larger sums insured and the policy is fully underwritten so therefore many factors are considered by the Life Insurance Company. With regards to ‘Dementia’ the Insurer will want to know a few factors before they can offer cover. This is generally things like initial diagnosis, family history, recent occurrences and frequency of as such, medication, other medical issues that are related and unrelated and how often a Doctor and/or Neurologist is consulted. With this information one of our Specialists can undertake a pre-assessment for you with the Life Insurance Providers that we compare. Funeral Insurance is generally for lower sums insured and does not require medical underwriting. Simply the Life Insured will be covered for any type of death providing it is a minimum of 12 months from the date the policy went into force. Please note that some Funeral Insurance Providers have a longer period than 12 months as I have indicated so you should check this. You are welcome to contact us on 1300 135 205 and our Life Insurance Specialists can look at these options for you.

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