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Life insurance normally describes cover for a fixed period. If you die while the policy is active, the insurer pays the agreed amount. If you survive beyond the end of the policy, the cover usually finishes without a payout.
Life assurance traditionally describes cover that is intended to remain in place for the rest of your life. Because death is certain to happen eventually, the policy is providing cover against an assured event rather than an event that might happen during a set period.
For people over 50, the distinction is particularly relevant because many over 50s plans are technically forms of life assurance, even though they are commonly marketed as over 50 life insurance.
What is life insurance?
Life insurance usually protects you for a specified period.
This is commonly called term life insurance.
You choose how much cover you want and how long you want it to last.
For example, someone aged 55 might take out £150,000 of cover for 15 years.
If they die during those 15 years and the claim is valid, the insurer pays the £150,000.
If they are still alive when the 15 year term ends, the policy usually finishes and no payment is made.
This type of cover is useful when the financial need itself has an end date.
A mortgage is a good example.
If your mortgage has 12 years left to run, you may only need a large amount of life cover for those 12 years.
Once the mortgage is repaid, the reason for having that level of protection may disappear.
What is life assurance?
Life assurance is traditionally used to describe insurance that covers an event that will eventually happen.
Everyone will die at some point.
A whole of life policy is therefore often described as life assurance because the policy is designed to pay whenever death occurs, provided the cover remains in force and the policy conditions are met.
There is no fixed 10 year or 20 year expiry date in the same way as term insurance.
This is the structure commonly used for traditional over 50s guaranteed acceptance plans.
You make regular premium payments according to the policy terms.
When you die, the policy pays the agreed cash sum following a valid claim.
Why are the words used interchangeably?
The insurance industry does not always maintain a strict distinction between the two expressions.
Many companies simply use life insurance as the general name for policies that pay money when someone dies.
A whole of life policy may therefore be described as life insurance even though life assurance would be the more traditional technical description.
You should not assume that a product is term cover just because a website calls it life insurance.
Equally, you should not assume that a product necessarily lasts for life simply because the word assurance appears in its name.
The policy terms matter more than the label.
Is over 50 life insurance actually life assurance?
Traditional over 50s life insurance is usually a form of whole of life cover.
That means it is closer to the traditional definition of life assurance.
The policy is normally designed to remain in place for the rest of your life, provided you continue to meet the payment requirements and other policy conditions.
There is usually no expiry date after 10, 15 or 20 years.
This is one of the reasons over 50s policies are often used by people who want to leave a modest amount of money towards funeral costs or for their family.
They want the policy to be there whenever they die rather than only during a particular period.
How does term life insurance differ from whole of life assurance?
The clearest difference is what happens if you live for a long time.
Suppose you are 55.
You take out a 20 year term life insurance policy.
Your cover runs until age 75.
If you die at 68, the policy can pay following a valid claim.
If you are alive at 75, the policy finishes.
Now compare that with a whole of life policy.
You take it out at 55 and keep the policy active.
If you die at 68, it can pay.
If you die at 75, it can pay.
If you die at 90, it can still potentially pay because the policy was designed to continue for life.
Illustration only. Any claim must meet the policy terms.
That difference affects both the purpose of the policy and how insurers price it.
Why is term insurance often able to provide more cover?
An insurer issuing term insurance might never need to make a payment.
Someone could take out 20 years of cover and survive for 21 years.
The policy has ended before death occurs.
Whole of life assurance is different.
If the policy remains in force for life, the insurer expects a valid claim eventually.
That increased certainty affects the cost.
This is one reason a term policy can sometimes provide far more cover than a traditional guaranteed acceptance over 50s policy for a similar monthly budget, particularly if you are in your 50s and in good health. The difference usually gets smaller as you get older.
The products are covering different risks.
Which type asks medical questions?
Term life insurance normally involves medical underwriting.
This means the insurer asks about your health and lifestyle before deciding whether to offer cover and what it should cost.
Questions can include your medical history, medication, smoking, height, weight and previous treatment.
The insurer may sometimes request additional medical information.
Traditional over 50s life assurance often works differently.
Many policies provide guaranteed acceptance within their eligibility rules without detailed medical questions.
This can make them attractive to people with existing health problems.
The easier application process comes with trade offs, including lower cover amounts and possible restrictions during the early period of the policy.
Does life assurance guarantee a payout?
The word assurance does not mean that every claim will be paid regardless of the circumstances.
- Premiums may need to be maintained.
- There may be an initial waiting period.
- Certain exclusions may apply.
- The insurer will still assess a claim before paying it.
Whole of life assurance is designed to provide lifelong cover, but it remains an insurance contract.
The policy must still be valid when the person dies.
Related guideDoes over 50 life insurance start immediately?What happens if you stop paying a whole of life policy?
This depends on the product.
With many traditional over 50s policies, failing to make the required premium payments can result in the policy ending.
If this happens, you may lose the cover and may not receive the premiums you have already paid back.
Some policies stop requiring premiums once you reach a particular age or after a specified number of years.
The cover may then continue.
The exact rules differ between insurers.
Anyone comparing whole of life policies should therefore check both how long the cover lasts and how long the premiums must be paid.
Can you pay more into life assurance than it pays out?
Yes.
This can happen with over 50s whole of life cover.
Imagine your policy pays £5,000.
You pay £25 each month.
That costs £300 a year.
After 10 years you have paid £3,000.
After 20 years you have paid £6,000.
You would then have paid more in premiums than the £5,000 cash benefit.
This does not mean the product has operated incorrectly.
Insurance is not a savings account.
If you had died after only a few years, your family might have received much more than you had paid in premiums.
But the possibility of paying more than the eventual benefit is something to understand before buying a whole of life over 50s plan.
Related guideTry the premiums vs payout calculatorDoes term life insurance have the same problem?
The calculation is different.
With term insurance, you are paying for protection during a specified period.
If you survive the full term, there is usually no payout at all.
For example, you might pay for a £200,000 term policy for 20 years.
If you die during those 20 years, the policy could provide substantial financial protection.
If you survive the full 20 years, the cover normally ends and the premiums are not returned.
That is not a fault in the policy.
You paid for the risk to be covered during those 20 years.
It is similar to many other types of insurance where you do not expect your premiums back simply because no claim was made.
Which is better for a mortgage?
Term life insurance is generally the more relevant type of cover to investigate for a mortgage.
A mortgage normally has an end date.
Your life insurance can be arranged to cover the years during which the debt remains outstanding.
If your mortgage has 15 years remaining, you might consider a 15 year term.
The insured amount can then be chosen around the outstanding mortgage and any other financial needs.
A traditional over 50s whole of life policy may not provide enough cover for a substantial mortgage.
Related guideTerm life insurance for over 50s: how does it compare?Which is better for funeral costs?
Whole of life cover may be more relevant if your aim is to leave a modest cash sum whenever you die.
A term policy could end before your death.
For example, someone taking out 10 years of term cover at 65 could survive to 80.
The policy would have ended five years earlier.
A whole of life over 50s policy is intended to continue rather than expire after a fixed number of years.
That can make the structure better suited to someone who specifically wants money available after their death.
The payout may not cover the full cost of a future funeral, particularly if it is fixed and prices have risen significantly.
Which is better for leaving an inheritance?
This depends on how much you want to leave and when the money is needed.
Whole of life assurance can be used for inheritance planning because it is designed to pay whenever death occurs.
However, traditional guaranteed acceptance over 50s policies generally provide relatively modest cash sums.
Someone wanting to leave a substantial inheritance may need to investigate medically underwritten whole of life cover or other financial planning options.
Term insurance can also leave a large amount of money to beneficiaries, but only if death occurs while the policy remains active.
The objective therefore matters more than the terminology.
Can someone over 50 still get ordinary life insurance?
Yes.
Turning 50 does not mean you have to move automatically to a guaranteed acceptance over 50s product.
Many people in their 50s and 60s can still obtain medically underwritten term life insurance.
Some people can obtain it at older ages as well, although availability and maximum policy terms become more limited.
Your health will affect your options.
A medical condition does not automatically prevent you from obtaining cover.
An insurer may accept you normally, charge a higher premium, ask for more information or decide it cannot offer cover.
Why does this distinction matter for people over 50?
The name over 50 life insurance can make the product sound like the standard life insurance option for everyone over 50.
It is not.
Traditional over 50s cover is one particular type of life insurance.
A healthy 52 year old with a mortgage and dependent children may need a large term policy.
A 76 year old who wants to leave £4,000 towards final expenses may be looking for something completely different.
Both people are over 50.
Their insurance needs have very little in common.
Understanding the difference between temporary life insurance and lifelong assurance helps prevent the product name from driving the decision.
A simple way to remember the difference
Think about the event being insured.
Will you die during this particular period?
When will you die?
With term insurance, the insurer may never have to pay because you could live beyond the end of the policy.
With whole of life assurance, death will eventually happen, so a valid policy is designed to produce a claim at some point.
That is the traditional reason for the two different words.
What matters more than the words insurance and assurance?
Check the actual policy.
Find out:
These details tell you far more than the product name.
A company could call a whole of life product life insurance and still provide lifelong cover.
The wording used in the marketing does not change how the contract works.
Speaking to a life insurance adviser
If you are over 50, it can be useful to compare the type of insurance rather than simply comparing several products with similar names.
A qualified life insurance adviser can look at why you want cover, how much money you want to leave, how long you need protection and whether you are comfortable answering medical questions.
They can then help you understand whether term insurance, guaranteed acceptance over 50s cover or another form of whole of life insurance may be appropriate to consider.
Speak to a qualified UK life insurance adviser who can compare options available through their panel. 50Life.co.uk can introduce you to an adviser who can discuss your circumstances. 50Life does not itself give personalised advice.
The simplest distinction is this.
Term life insurance protects you for a period.
Whole of life assurance is designed to protect you for life.
Once you know which of those you actually need, comparing policies becomes much easier.
