Insurance is a protection tool that grows and changes with you as you go through life. But as premiums usually increase with age, it’s important to ensure that your cover keeps up with your needs and budget.
The reality is, you’re never too old to have some sort of personal insurance protection in place. If anything, that’s when you’re most likely to need cover, so affordability is key. Here are some things to consider if you’d like to keep an appropriate level of cover in your later years.
It’s true that the older you are, generally the more expensive your premiums will be– but that’s because you’re also more likely to claim.
If you don’t have significant sums of money sitting in the bank, a personal insurance policy may help you stay financially afloat if something were to happen to you that stopped you from earning.
Depending on your situation and affordability needs, it could be possible to avoid age-related premium increases on life insurance by taking out a level policy mid-life (in your late 30s or 40s). But if you’re past the stage where that would be a helpful option, or you decide it’s not for you, there are other ways to make your policies more affordable.
For policies such as income protection, you can extend the wait time before a benefit is paid. You can increase the excess, or, for lump sum covers, review how much you need and what you need it for.
Please get in touch to learn more about the pros and cons of each solution, and what could be a good fit for your circumstances.
What about self-insurance?
Some older people opt for ‘self-insuring’ – putting the money they would spend on their premiums into a bank account to draw on if they hit an unexpected medical expense.
However, it can be hard to find the resolve to stick to in practice, and the sums of money required for some medical procedures can easily run into six figures. As insurance advisers, we can help you work out what you need to rely on insurance for, and whether you can introduce an element of self-insurance (which depends on how big your ‘emergency’ fund can be).
Whatever your age, if you need your income to maintain your lifestyle, or worry about whether you could handle the wait for medical treatment via the public health system, it’s important to have a backup plan to lean on. Insurance can be a big part of that.
Other assets and income
As we get older, we tend to amass more assets and rely less on an income from a job as we develop a bigger store of investments to fall back on (before eventually shifting more and more to reliance on the pension or investment income).
This can have an impact on your insurance needs.
If you have an income protection policy in place, for example, and you get to the point that your investment assets provide enough income to live on, this type of cover may no longer be needed. However, your family may still benefit from a life insurance payout and the money or assistance that a trauma policy or medical cover can offer if you’re seriously ill.
By reviewing your policies on a regular basis – with our help of course – you can ensure that your cover keeps up with your family’s circumstances and budget.
If you already hold insurance policies, think carefully before cancelling them later in life because it’s unlikely you’ll get them on the same terms again.
Medical conditions can arise throughout your life; as long as you keep the same policy in place, you’ll be covered for future occurrences of those conditions. But if you cancel, you’ll likely find that any insurance in future refuses to cover them.
We’re here to help
Wondering about the right structure to take your insurance into old age? Please don’t hesitate to contact us. We work with clients of any age and budget to help them secure cover, at a price they’re comfortable with.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.