There’s a growing negativity surrounding over 50s life insurance. From a recent slating on LoveMoney.com to Le Beau Visage managing director Peter Le Beau’s comments last year aligning them with PPI miss-selling, where he describes “rumblings about these over-50s’ whole- life plans.” The common factor is that they don’t guarantee a return on investment, in the same way a savings plan would.

If life insurance cover is started at 50, and continues to run for 20 years, then obviously the person taking out that cover won’t see as good a return as they would in a savings account, and they won’t recoup all the money paid. The maths is quite simple. At that point it becomes easy to cry ‘scheme’, ‘false promises’ and ‘rip-off’. But the reality is that life insurance should never be considered as a long term savings investment. It isn’t saving; it’s insurance, a whole other kettle of fish.

Younger people have insurance to give themselves peace of mind; to know that their families will be looked after should the worst happen. Every driver has car insurance. Most households have home insurance. None of these are looked at in terms of investing, or returns. The point of life insurance, all insurance, is to provide a buffer should the unexpected happen. Customers don’t complain that their home or car insurance isn’t providing strong returns on investment. As long as over 50’s life insurance remains just that, a life insurance policy, then the idea of returns becomes a mute point.

Over 50s life insurance became a specialism because the cost of continuing life insurance policies beyond the age of 50 became prohibitive, and yet there was, and still is, a call for life insurance with older customers. There is peace and security to be had in knowing exactly how much will be left to loved ones after a premature death. One that can’t be replaced by calculations of what money might be worth if a life is as long and full as it should be.

Tags: life insurance