Once you’ve made the decision to take out an Over 50s Life Insurance policy with British Seniors, you can enjoy peace of mind by immediately knowing that the benefit amount can help towards funeral costs and other debts after you're gone.
Life is uncertain and while some of us have faith, others have a plan. When you’ve taken the steps to join the latter group, you’re in control.
The British Seniors promise
Customers love our Over 50s cover because it’s straightforward and transparent. You decide how much you want to pay each month (it can be as little as £3.72) and how much cover you want (up to £20,000, depending on your age).
We set up your cover almost immediately, with the guarantee that your premium won’t change unless you choose the Increasing Benefit Option to help protect your policy from the effects of inflation. We also guarantee that when the time comes to make a claim, we’ll respond with a fast and personal service.
Why should I worry about inflation?
Some things, however, are out of our control - such as inflation. As the years roll by, your lump sum benefit will stay at the figure you arranged, but the relative value of that benefit might not keep up with inflation.
In other words, you might take out a policy tomorrow with a £10,000 benefit, knowing that it would be enough to cover funeral expenses and other outstanding bills. But none of us knows if £10,000 will be enough in 15 or 20 years’ time.
We’re lucky at the moment that inflation in the UK is relatively low, at around 2% per year, but we’ll all have heard the stories (or remember) when inflation hit almost 25% in the 1970s. If that were to happen again, the pound you save today is able to buy less and less tomorrow.
British SeniorsOver 50's Life Insurance
Inflation in action
You don’t have to be an economist to know that inflation has made the biggest waves in the housing market. In fact, you just have to open a paper or walk past an estate agents to witness the steady rise of property prices.
In 2005, the average UK home cost £150,633. By August 2018, that had risen to £231,926. Great news if you’re a homeowner, but a sobering statistic if the house you’re trying to buy today costs £80,000+ more than it did just over 10 years ago. Same bricks, same address, totally different financial commitment.
By contrast, the average real earnings in the UK has gone down. In 2005, average salaries adjusted to match the Retail Price Index were £23.1k, whereas by 2018 higher prices meant the average salary was £21.4k.
Funeral costs affected by inflation
Since many people take out Over 50s Life Insurance to cover funeral costs, it’s worth pointing out these are on the rise, as more and more funeral services move from local authority control to the private sector.
The average cost of a funeral in the UK is £4,271, but this has soared by a staggering 68% in the past 10 years. And the price is unlikely to come down as competition for burial plots intensifies.
If that pattern were to repeat over the next 10 years, it’s easy to see how today’s lump sum benefit may struggle to keep pace with inflation. But there is a solution...
What is Increasing Benefit Option?
One of the ways you can anticipate and stay ahead of inflation is through the Increasing Benefit Option. If you decide to select this option, the benefit amount will increase automatically by 3% of your initial benefit amount each year. So, it could be worth as much in 20 years as it is today, in real terms.
In a nutshell, your premiums and benefit will increase each year. It’s important to note that your premiums will also increase automatically by a fixed amount of 4.5% of your initial premium amount each year on your policy anniversary. It’s an ideal option if you’re planning long-term insurance cover. After all, none of us has a crystal ball and even the Chancellor of the Exchequer gets the sums wrong from time to time.
How does British Seniors Increasing Benefit Option work?
With our Increasing Benefit Option, the benefit will increase each year on the policy anniversary by 3% of your initial benefit amount, with your premium rising accordingly.
Control of your policy is always in your hands, however. You can ask us not to apply the increasing benefit and keep your monthly payments and the benefit the same - but after three consecutive opt-outs your policy will revert to fixed benefit.
Remember that you can always choose to increase or decrease your monthly premiums at any time on the fixed policy. With Insurance Inflation Protection, on the other hand, you can just leave it to us to calculate and leave yourself with one less thing to worry about.