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Over 50s Life Cover explained

Here are some common questions about Post Office Money® Over 50s Life Cover. 

 

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What is Post Office Money Over 50s Life Cover? 

It's a simple way to leave your loved ones a cash sum when you die.

Lots of people use policies like this to help cover the cost of their funeral when they're gone. In 2016, the average cost of a funeral was estimated at £3,675*.

The money can also be used as a gift, to settle unpaid bills and more. 

 

How does it work?

Post Office Money Over 50s Life Cover is a life assurance policy provided by Royal London.

You choose how much you want to pay per month, from as little as £7 (just 24p a day) to £100. The more you pay, the bigger the cash sum your family will get when you’re gone.

You could leave behind up to £25,000. The amount of money your policy pays out will depend on how and when you die.

What we'll pay out when

If you die from: When: We'll pay out:
Accidental death** In the first 12 months The full cash sum
Any other cause  1.5x times the money you've paid up to that point
Accidental death** After the first year 2x the full cash sum
Any other cause  The full cash sum 

 

Get covered right away. Help towards the cost of your funeral or leave a gift when you're gone.

Some common questions

About your cover

How long will it cover me for?

Your Post Office Money Over 50s Life Cover policy continues for the rest of your life.

You just need to keep making monthly payments until whichever of these happens soonest:

  • The policy anniversary date on or after your 90th birthday
  • 30 years from the start of your policy
  • You pass away

 

How much cover can I have?

You can apply for a maximum cash sum of £25,000 or pay a maximum of £100 per month, whichever is lower.

You can have more than one Post Office Money Over 50s Life Cover policy but the total amount of cover across all of these policies can't be more than the maximum cash sum and maximum payment amount limits. 

If an application takes you above these limits, we'll reduce the cash sum of your most recent policy, or cancel it, to ensure the maximum limits aren't exceeded. We'll write to you to confirm we've done this.

How will you work out my level of cover?

Your monthly payment amount, plus your age, will affect the life cover amount. The amount you pay each month will always stay the same.

The total amount you pay overall will depend on your monthly payment and how long you live.

For example, if you choose a monthly payment of £15:

After: Paying: You'd have paid:
5 years 60 monthly payments of £15 £900 total
10 years 120 monthly payments of £15 £1,800 total
20 years 240 monthly payments of £15 £3,600 total

These figures are an illustration only, as monthly payments made under your policy may be made for a longer or shorter period than these examples.

You may pay more in premiums than the cash sum will pay out.

 

About what you pay

How long will I make payments for?

With Post Office Money Over 50s Life Cover it's a fixed payment term. You pay for a maximum of 30 years, or to the policy anniversary date after you turn 90, or until you pass away – whichever comes first.

 

Can I reduce my payments?

Yes. You can reduce your monthly payments in £1 decrements as long as it doesn't fall below the minimum £7 a month as a result. The pay-out amount will reduce in line with the reduction. You won’t be able to increase your payments after reducing them. 

Can I increase my payments?

No, but if you want to leave more money behind you can apply for an additional or top up policy from as little as £7 a month, as long as it doesn't take you over the maximum limits.
 

What happens if I stop paying?

If you stop paying regular monthly payments before the end of the policy term, your plan and cover will end 60 days after the date the last payment was due. You won’t get back any payments you’ve already made.

Can I cancel the policy?

You can change your mind and cancel your policy at any time.

If you cancel within 30 days of the date you receive your policy documentation, we'll refund any monthly payments made.

If you wish to cancel your policy you can find all of the information you need here.

If monthly payments due under the policy stop at any other time, your cover will stop and you won’t get anything back. 

What we pay out and when

Who will the cash sum be paid to if I die?

If the policy is assigned, it will pay out to the Assignee. If it's under Trust, it will pay out to the Trustees.

If Funeral Benefit Option has been applied to your policy, we will pay the cash sum to the funeral provider. In all other circumstances we'll pay out the amount to the Life Assureds Personal Representatives.

Will my family receive any money if I die in the first year?

 

Yes, if you die as a result of an accident (that meets our definition) in the first 12 months we'll pay the full cash sum. If you die from natural causes in that time we'll pay one and a half times the payments you've made.

Can I cash in my plan?

No. The plan has no cash-in value at any time.

What about tax?

The cash sum paid on death is currently free from personal liability to income tax and capital gains tax.

However, it could form part of your estate so may affect the inheritance tax your family pays. By writing your policy in trust the insurance could be paid to them directly and never become part of your estate. That means no inheritance tax to pay.

We can supply trust forms but we'd suggest seeking advice before you complete them. Get unbiased help contacting professionals such as IFAs and solicitors. 

When would the plan not pay out in full?

If you die other than as a result of an accident (as explained in the Post Office Money Over 50s Life Cover Terms and Conditions) during the first 12 months of your policy, your estate will receive an amount equal to one and a half times the payments made. An accidental death does not include any of the following causes:

  • suicide, attempted suicide or intentional self-inflicted injury; or
  • death linked to being under the influence of, or being affected (temporarily or otherwise) by alcohol or drugs.

Funeral Benefit Option

What is the Funeral Benefit Option?

If you’re planning to use the cash sum from your Over 50s Life Cover policy to help pay for your funeral, the Funeral Benefit Option can help.

When the time comes, the cash sum from your policy will be paid to Dignity Funerals Limited – one of the UK's leading providers of funeral services.

With a single call, they’ll put your funeral plan in motion, take care of all arrangements, and even put an extra £300 towards the final cost.

With over 770 Funeral Directors around the UK, there’s help and support for your family when they need it most.

Will the Funeral Benefit Option cost extra?

No. There’s no set up charge, no application fee and no hidden costs. Plus, you or the person arranging your funeral can cancel the Funeral Benefit Option at any time if you decide that it isn’t right for you. If you cancel the £300 will not be paid.

Can I add the Funeral Benefit Option to an existing policy?

You can add the Funeral Benefit Option to your policy at any time if you purchased your policy from 31st January 2017 and you haven’t already added the Funeral Benefit Option to any other Post Office Money Over 50s Life Cover policy, or any similar policy you hold with another provider.

If you already have a pre-paid funeral plan you would not be able to add the Funeral Benefit Option to your policy. Also, if you decided to take out a funeral plan in the future, the Funeral Benefit Option would be cancelled. Once you remove the Funeral Benefit Option you cannot add it back on.

Is it possible to cancel the Funeral Benefit Option?

You can remove the Funeral Benefit Option at any time before your death, or your representatives can choose to remove it upon your death as long as they do so before Dignity has been instructed to provide your funeral service. If the Funeral Benefit Option is removed at any time, the cash sum from your Post Office Money Over 50s Life Cover policy would be paid to your estate, and Dignity will not make the £300 contribution to your funeral costs.

What if I die in the first year?

If you die of natural causes within the first year of taking out your Post Office Money Over 50s Life Cover policy, the full cash sum would not be payable. Instead, all of the monthly payments you have already made, plus half as much again would be paid to your estate rather than to Dignity. However, if your representatives decide to use Dignity for your funeral, they would still be entitled to the £300 contribution towards the final cost of your funeral.

If you die as a result of an accident (see the Post Office Money Over 50s Life Cover Terms and Conditions for an explanation of accidental death) within the first year of taking out your Post Office Money Over 50s Life Cover policy, the full cash sum would be paid to your estate rather than Dignity. However, if your representatives decide to use Dignity for your funeral, they would still be entitled to the £300 contribution towards the final cost of your funeral.

Where is my nearest Dignity funeral director?

You can find the nearest site on the Dignity website. Remember, this is the nearest Dignity funeral director today, but won't necessarily be the nearest when the funeral is to be arranged.

What if my family don’t want to use a Dignity Funeral Director?

Using Dignity is the only way to qualify for the extra £300 contribution they provide. But it's possible to remove this option at any point before Dignity have actually been instructed to provide the funeral.

 

What happens to the Funeral Benefit Option if I place my policy in trust?

You will need to cancel the Funeral Benefit Option before your policy can be placed in Trust. 

Support for your loved ones

How does someone claim on my policy?

Losing a loved one is a difficult time. The last thing those you leave behind need is a drawn out claims process.

When the time comes, we'll make it easy for your personal representatives to claim the cash sum from your policy.

If you've recently lost someone and need to claim, you can find all of the information you need here.

 

 

 

What will we need to process a claim?

We'll need to know the policy number and details of the claim.

The person making the claim must send all original documentation to us, showing they are entitled to receive the cash sum, before we will pay any cash sum to them.

This documentation must include any deed of assignment, trust deed, or deed altering the trust.

Full details of the claims procedure can be found in the Terms and Conditions, which will be sent to you when your policy starts.

What is Post Office Money Helping Hand?

It's a service offered with Post Office Money Over 50s Life Cover at no extra cost, that provides one-to-one, long term support from a dedicated personal nurse adviser during bereavement and serious illness.

In these most difficult of times, an advisor from independent nursing service RedArc will provide support if you lose someone, and to your immediate family if you pass away.

They'll also be there for you if you're diagnosed with a serious illness such as cancer, cardiac condition, stroke or multiple sclerosis.

If it’s beneficial, a course of assessed therapy or counselling can also be provided. And you can use the service without ever having to claim on your policy.

This service, provided by RedArc is not part of the Post Office Money Over 50s Life Cover contract and can be withdrawn at any time.

Other common questions

Can my partner take out cover?

Yes. Cover is available to anyone who's a permanent UK resident aged 50 - 80 and hasn't already exceeded the maximum payment amount or maximum cash sum limits.

Please note, it's not possible to have more than one person on each policy, so your partner’s application will create a separate policy.

Can I write the policy under trust?

It is possible to write the policy under trust and we can supply a template trust deed.

We only offer one template deed; a discretionary trust, which may not always be suitable. We'd suggest seeking advice before you complete it to ensure it is suitable for your circumstances.

Get unbiased help contacting professionals such as IFAs and solicitors.

Get covered right away. Help towards the cost of your funeral or leave a gift when you're gone.

Things you need to know

*The Royal London National Funeral Cost Index Report 2016
**Explained in Post Office Money Over 50s Life Cover Terms and Conditions

Post Office Money Over 50s Life Cover is provided by The Royal London Mutual Insurance Society Limited.  

Depending on how long you live, you could pay more in monthly payments than the cash sum we pay out when you die. The cash sum you choose is fixed and inflation (the rising cost of goods and services) will reduce its value over time.

We only pay out on death. There is no cash-in value at any time. If you die from natural causes in the first 12 months, we will pay one and a half times the payments you have paid. If you die from natural causes after 12 months we will pay the full cash sum. If you die from an accident in the first 12 months (please refer to the Post Office Money Over 50s Life Cover Terms and Conditions for an explanation of accidental death), we will pay the full cash sum. If you die as a result of an accident after the first 12 months, we will pay two times the cash sum.

We will stop collecting payments after a maximum of 30 years, or on the policy anniversary date after you reach age 90 or when you die, whichever is sooner. If you stop making your payments your cover will end and you’ll get nothing back. We can tell you about our cover but cannot advise if it is right for you. If you are not sure if it is right for you, please ask your financial advisor, or visit unbiased.co.uk to find one who could help.

Click here if you would like to read the Terms and Conditions. If you apply for cover, you will also receive them with your policy documents.

The Funeral Benefit Option is not regulated by the Prudential Regulation Authority or the Financial Conduct Authority.

RedArc Ltd is an independent care advisory service and is not regulated by the Financial Conduct Authority. 

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