Life Insurance For Over-60s: Our Pick Of The Best

We carried out some research (January 2024) with our life insurance partner, Lifesearch, to find our pick of the best providers for level term life cover for the over-60s.

We based our search on a healthy non-smoking applicant, aged 62, looking to take out £200,000 worth of life cover under a single policy.

Our search returned four insurance quotes (listed below), illustrating the more limited choice for applicants of this age. See more detail in the methodology, below.

We obtained life insurance quotes through Lifesearch, our life insurance partner, for £200,000 worth of life cover for a single 62-year old (insurers are not permitted to price based on gender).

We assumed that the individual was a healthy non-smoker, with no pre-existing medical conditions, and working in a low-risk job. On this basis we looked for level-term life cover spanning 10 years.

We ranked the policies predominantly based on the price but we also looked at:

• Percentage of claims paid
• Customer service score (as rated by Fairer Finance, January 2024)
• Any other benefits that come free with the policy.

All policies listed offer a funeral pledge of at least £5,000 which bridges any gap in costs between the funeral and getting the full payout. All cover comes with the option to be written in trust.

All the policies listed cover terminal illness as standard. This means the policy will pay out on terminal illness or death (whichever happens first).

Critical illness cover, if required, will need to be added separately to the policy, and could increase the monthly premium you are quoted.

In line with industry standard, none of the life insurers provide cover for suicide for the first 12 months.

According to a Forbes Advisor survey, around 32% of people who have life insurance hold a term policy. A term policy works in the same way whatever your age. You’ll pay a monthly premium to insure a specific sum, such as £100,000, over a fixed term, such as 20 years. If you die within the term your beneficiaries receive a tax-free lump sum.

It is important to have your life insurance policy written ‘in trust’ so that the payments go directly to your beneficiaries and do not form part of your estate for inheritance tax purposes. Your life insurance broker or policy provider will discuss this with you and provide the necessary assistance – be sure to ask if they don’t.

You can opt for a level term policy, where the payout lump sum remains the same for the term, or a decreasing term policy, where the sum insured falls gradually over the term (this type of cover is cheaper). Both level and decreasing term policies are frequently taken out to run alongside a mortgage term.

The main difference for over-60s will be the monthly premium – or the cost of cover. Someone in good health who is aged 30 when they take out life insurance will pay a much lower premium compared to someone at the age of 60. This reflects the higher chance of a claim.

There is another type of life insurance cover designed for older people, often referred to as over-50s life insurance or a funeral expenses plan. This type of lower-cost cover guarantees to pay out a smaller lump sum on death (this is not with a fixed term but at any time), provided you have made the monthly payments.

According to life insurance survey by Forbes Advisor, around 11% of people with life insurance have an over-50s life insurance policy of this kind.

You don’t have to answer any medical questions or have a medical to be accepted for over-50s life insurance. But the downside of this type of plan is that if you live for a long time after taking out the cover you could end up paying a lot more in premiums than is paid out to your loved ones on your death.

There is no maximum age for life insurance in the UK, but different insurers will have their own age policies when it comes to cover.

While some insurers may not be able to offer life cover to those over the age of 65, for example, others may be willing to go to much higher ages, subject to medical checks or a reduced term, such as 10 years of cover instead of 20.

That said, term life insurance for someone aged 70, even if they are in rude health, is likely to be very expensive.

As previously mentioned here, age is one of the main factors determining the cost of life cover. That means the older you are the more you pay for cover.

According to online broker LifeSearch a term life insurance policy for £100,000 over 10 years would cost from around £15 a month for someone aged 53. This compares to a monthly premium of around £46 for someone aged 63. And looking at our listings above, cover can be pricey. All premiums are also assuming the applicant is in excellent health and a non smoker.

How much you’ll pay for life cover when you’re over 60 will depend on a range of factors, including your state of health and your lifestyle (if you’re a smoker or regularly drink alcohol for example) and if you have any pre-existing conditions.

The level of your premium will also depend on how much life insurance you want and over what time period you want the cover.

A lower cost option might be an over-50s life insurance plan, also known as a funeral savings plan (mentioned in the sections above). The table below shows illustrative costs of cover under this type of policy.

The monthly premium quotes are for a non-smoker for £10,000 of cover (guaranteed payout on death). For policyholders over 70 the maximum insured sum is shown in brackets. This is because not all ages are able to secure a sum assured of £10,000.

Getting life insurance, and at a reasonable price, can be more tricky if you have a pre-existing medical condition, even something fairly common such as high blood pressure. This can be particularly true if you’re over the age of 60.

It may still be possible to get cover but the insurer is likely to want to know much more detail about your condition and your general state of health. You may be asked to attend a medical examination, for example, or the insurer may ask to see medical records and notes (with your consent).

As with life insurance cover at any age, policyholders should expect to pay more if they have pre-existing conditions.

You and a partner can get joint life cover whether one or both of you is over 60. There are pros and cons to joint life insurance so it is worth taking time to consider which option is best for you.

While a joint life policy is likely to be cheaper, it will only pay out once – on the first death. In the event this happens and a payout is made the policy will end. This leaves the second policyholder without cover.

If your relationship ends you could also end up without cover, or needing to purchase a new policy, as a joint life policy cannot be split.

Buying term life insurance at 60 is likely to be expensive. But there are ways to reduce the premium you pay. You could consider:

• Insuring a smaller sum, such as £50,000 instead of £100,000
• Reducing the term of the cover, such as 10 years instead of 15
• Improving your health and lifestyle, such as losing weight and stopping smoking (to be classed as a non-smoker by insurers you must not have used any tobacco or nicotine products, including nicotine replacement products, for at least 12 months).

Shopping around for cover using an online broker, such as our partner LifeSearch, can also help you find the best product at the lowest price.

If you still have dependents who rely on you and your income, if you have a mortgage or other debts, or if you want to leave a lump sum to loved ones, perhaps to cover funeral costs, then life insurance could be worth it, depending on the cost. Even a small lump sum payout could be helpful at a difficult time.

It is important to get quotes for cover first and work out if the outlay in cost will be worthwhile for peace of mind that your family is protected if you were to die. Discuss your financial arrangements with family members to find the right solution.

For many people over the age of 60, lower-cost cover through an over-50s life insurance plan could suit their needs. This pays out a much smaller guaranteed lump sum on death, typically to cover funeral expenses.

Recent research by insurer Scottish Friendly found the main reason for taking out this type of insurance plan was to pay for funeral costs, as the table below shows.