Shepherds Friendly Over 50s Life Insurance How It Works

Acceptance is guaranteed within the eligibility rules and there are no medical questions or medical examinations.

The policy provides whole of life cover with a fixed cash sum.

Current monthly premiums range from £10 to £50.

How does Shepherds Friendly Over 50s Life Insurance work?

You choose the monthly amount you want to pay and receive a fixed cash sum based on your age, whether you smoke and the policy terms. Shepherds Friendly asks whether you smoke or have used tobacco or nicotine replacement products in the last 12 months. If that answer is wrong, or you start using these products during the plan without telling Shepherds Friendly, the amount paid out can be reduced to the smoker rate.

Your standard premium remains fixed.

The cash sum also remains fixed, which means it does not automatically rise with inflation.

This gives predictable costs but can reduce the real value of the payout over a long period.

For example, £6,000 may contribute significantly towards final expenses today but may buy less if the claim occurs several decades later.

When does full cover begin?

Shepherds Friendly currently uses a two year initial period.

This is longer than the one year period used by several other guaranteed acceptance providers.

If you die from natural causes or a medical condition during the first two years, and your payments are up to date, Shepherds Friendly currently pays 150 per cent of the premiums you have paid rather than the full insured amount.

If death results from an accident during the first two years, and your payments are up to date, the full insured amount can be paid. Some causes are excluded from the accident cover, such as injuries you cause to yourself and drug or alcohol misuse, so check the policy terms.

Once the two year period has passed, the full cash sum becomes payable following a valid claim for death covered by the policy.

The length and terms of this waiting period should be considered when comparing Shepherds Friendly with other over 50s insurers.

How long do premiums continue?

Premiums continue for a maximum of 30 years or until age 90, whichever happens first.

Once the required payment period ends, the life cover continues.

The monthly premium may be fixed, but the total amount you pay depends heavily on how long the policy remains in force. Depending on how long you live, the total premiums you pay could be more than the cash sum paid out.

What happens if you stop paying?

If required premiums are not maintained before the point at which payments are due to stop, the policy can end.

Shepherds Friendly states that cancellation following missed payments can result in the loss of cover without a refund of the premiums already paid.

The policy does not operate like a savings account.

Choose a monthly amount that is realistic to maintain.

Does it include funeral benefits?

Shepherds Friendly currently provides an optional Funeral Benefit Option through Co-op Funeralcare.

Depending on the funeral selected, this can provide a discount of up to £250.

The current figures are £250 for a Tailored funeral, £100 for an Essential funeral and £50 for a direct cremation or burial.

The Funeral Benefit Option is not available in Northern Ireland. The discount does not apply if death from natural causes or a medical condition happens in the first two years.

The policy also provides access to the National Bereavement Service under its present arrangement.

These additional services should not distract from the main comparison.

The amount of life cover, premium and waiting period remain the most important features.

Who might consider Shepherds Friendly cover?

Guaranteed acceptance can be useful for someone with medical conditions who wants a modest lifelong payout without medical underwriting.

However, it should not automatically be chosen simply because you are over 50.

A reasonably healthy person in their 50s or 60s may be able to obtain much more cover through medically underwritten life insurance.

Someone needing £100,000 or more for a mortgage or family protection would generally need to investigate standard insurance rather than relying on a small guaranteed acceptance policy.

Speak to a qualified UK life insurance adviser who can compare options available through their panel. Shepherds Friendly sells this plan directly and through some advisers, but the adviser we introduce you to may not have Shepherds Friendly on their panel. 50Life is not part of Shepherds Friendly. We introduce you to the adviser and do not ourselves give personalised advice.