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Over 50s Life Cover explained

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

 

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What is Post Office 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. Between 2016-2021, the average cost of a funeral cost around £5,631*

* Source: British Seniors Funeral Report 2021

How does it work?

You choose how much cover you'd like to take out to leave behind for your loved ones when you're gone. You're guaranteed to be accepted if you're aged 50-80 and a UK resident. You're also not required to complete a health check, applying for cover is simple and straightforward.

Depending on your age, you could leave up to £10,000 cash sum. See below table for maximum cover amounts.

What we'll pay out when

Age at application date Maximum cover amount
50-69 £10,000
70-74 £9,000
75-80 £6,000

 

The cash sum you choose will remain fixed throughout the duration of your cover, unless you select the Increasing Cover Option.

What is the Increasing Cover Option?

If you select this option, the cash sum you choose will increase automatically by a fixed amount each year on the anniversary of your cover. Your premiums will also increase automatically by a fixed amount each year on the anniversary of your cover. Please refer to Post Office Over 50s Life Cover Terms and Conditions for further information about Increasing Cover Option.

You can however, opt-out of any annual increases, but if you opt-out of 3 increase in a row, the increasing option will be removed and the cover would remain level thereafter i.e. your cash sum remains the same through out the cover term.

Protected Benefit

Your Over 50s Life Cover policy comes with a protected benefit which means if you stop paying your monthly premiums, we will still pay-out at least half of the cover amount on your death (as long as you're at least halfway through paying for your cover. The halfway point is calculated from the policy start date and the policy anniversary after you turn 95).

What we'll pay out when

Event Cash sum payable
Accidental death 2 times the cover amount
Death from natural causes in the first 12 months from the cover start date 1.5 times all the premiums paid
Death from natural cause after the first 12 months from the cover start date Full cash sum

 

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Some common questions

About your cover

How long will it cover me for?

Your Post Office 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 95th birthday
  • You pass away

 

How much cover can I have?

Depending on your age at the time of making the application, you can apply for a maximum cash sum of £10,000.

You can have more than one Post Office 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 much does cover cost?

The amount of premium payable will depend on the cover amount you choose; your age, and smoker status, whether you have a single plan or a joint plan; and whether you have selected the Increasing Benefit option. Premiums are payable monthly.

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 Over 50s Life Cover it's a fixed payment term. You pay until the policy anniversary date on or after you turn 95, or until you pass away - whichever comes first.

The total amount you pay overall will depend on your monthly payment and how long you live. You may pay more in total in premiums than the cash sum that the policy will pay out.

 

Can I change my Cover amount?

If at any time you'd like to increase your cover amount (other than increases under the Increasing Benefit Option), then the cover amount increases will be subject to a new deferred period from the date the change is made. The benefit amount increase will also be subject to the maximum cover amount available based on your age at the time.

If you wish to do so, you can reduce the cover amount at any time, subject to the minimum cover amounts available. If you do reduce the benefit amount, the monthly premium will be reduced accordingly.

What happens if I miss my payments?

If two consecutive premiums are missed before you are at least halfway through your cover, your cover will end. As soon as you miss a premium payment, we will try to contact you to discuss your payment arrangements and may also reattempt to collect your monthly premium from your nominated bank account.

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 and you have not paid at least half of the premiums due, your cover will stop and you won't get anything back and you will not be eligible for protected benefit.

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 two times the 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. 

What is not covered?

During the first 12 months from the start date of the cover, the amount you will be paid for death by natural causes will be limited to the return of 1.5 times all premiums paid towards the cover.

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 Co-op Funeralcare – 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 depending on the type of funeral you choose, they will give you a discount of up to £250 towards the final cost.

With over 800 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 is no extra charge to add the funeral benefit option to your Post Office Over 50s Life Insurance policy.

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 22nd February 2021 and you haven’t already added the Funeral Benefit Option to any other Post Office Over 50s Life Cover policy, or any similar policy you hold with another provider.

If you already have a funeral plan you would not be able to add the Funeral Benefit Option to your policy. Also, if you decide 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 Co-op Funeralcare 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 Over 50s Life Cover policy would be paid to your legal beneficiary, and Co-op Funeralcare will not make the applicable discount payment towards 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 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 Co-op Funeralcare. However, if your representatives decide to use Co-op Funeralcare for your funeral, they would still be entitled to the applicable discount payment towards the final cost of your funeral.

If you die as a result of an accident (see Post Office Over 50s Life Cover Terms and Conditions for an explanation of accidental death) within the first year of taking out your policy, the insurer, AIG Life Limited, will pay out two times your cash sum amount. Only your original benefit amount will be paid to Co-op Funeralcare up to the cost of your funeral. The remaining benefit amount will be paid out to your legal beneficiary.

Where is my nearest Co-op Funeralcare director?

You can find the nearest site on the Co-op Funeral homes website. Remember, this is the nearest Co-op Funeralcare 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 Co-op Funeralcare?

Using Co-op Funeralcare is the only way to qualify for the applicable discount. But it's possible to remove this option at any point before Co-op Funeralcare 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, find out all the information you need to make a claim.

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 Here to Help ?

It's a service offered with Post Office 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 Over 50s Life Cover contract and can be withdrawn at any time.

What is Post Office Health and Well Being Service?

This is a free access to the health and wellbeing services, designed with your physical and mental wellbeing in mind. You'll have access, at no additional cost, to 24/7 Online GP (UK registered), Nutrition and Fitness professional to get you to your goal, Mental Health and Health Check specialist 365 days a year. There’s no cap on how many times you can use these services, and your partner and any children up to age 21 can take advantage too.

Other common questions

Can my partner take out cover?

Yes, Cover is available to anyone who's a permanent UK resident aged 50-80 either under a single plan or a joint plan.

Can I write the policy under trust?

You may be able to avoid inheritance tax by using an appropriate trust. If you require any additional information or are unsure what to do, please speak with a financial advisor or solicitor.

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

Things you need to know

Post Office Over 50s Life Cover is underwritten and administered by AIG Life Limited. Neilson Financial Services Limited assist in the administration.

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, unless you choose the Increasing Benefit option, (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. In the event of death by accident, we will pay two times the full cash sum. In the event of death by natural causes, where death occurs in the first 12 months from the policy start date, we will pay 1.5 times the total premiums paid towards the cover. In the event of death by natural causes, where death occurs after the first 12 months from the policy start date, we will pay the full cash sum, please refer to Post Office Over 50s Life Cover Terms and Conditions for further information.

We will stop collecting payments on the policy anniversary date on or after you reach age 95 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.

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

Post Office Here to Help (provided by RedArc Limited) and Post Office Health and Wellbeing Services (provided by MediPartner Limited) are independent health and advisory services and are not regulated by the Financial Conduct Authority.

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