59% of UK adults aged over 50 have no plans in place to cover the cost of their funeral, yet only 7% are worried about how their family will pay for it.
The study by Censuswide Research, conducted on behalf of Royal London among the over 50s, also found that the majority (64%) underestimate the cost of their funeral; and four in 10 people over the age of 50 (43%) have not thought about their arrangements at all.
The new findings come as Royal London – the UK’s largest mutual life and pensions company with 5.3m customers and half a million members – begins a new drive to shake-up the ‘over 50s’ life insurance market.
Royal London’s research found that 39% of people aged over 70 are not saving any money to cover the cost of a funeral. An insurance plan provides an immediate and low-cost solution for this group, but one which has typically provided poor returns in the past.
Royal London claims it wants to transform this market space, which it says offers “appalling” value for money, and has launched its new Over 50s Life Cover.
The following features will be exclusive to Royal London customers:
- Protected Payout – If a customer has to stop paying premiums altogether, provided the policy has been going for at least half the term, Royal London will pay out at least half of the cash sum on death.
- Flexibility – Monthly premiums can be reduced at any time to £5 a month. Or customers can choose to increase their cover if they need to, with a new policy from just £1 a month more.
The cover also includes the following features:
- Guaranteed Acceptance to all 50-75 year old UK residents, with no health or lifestyle questions.
- Guaranteed cash sum – After the policy has been in place for a year, Royal London will pay a cash sum in the event of death.
- Funeral Benefit Option – If a customer chooses this option, Dignity Funerals Limited will pay a £300 contribution towards the customer’s funeral with them.
- Terms and conditions apply – full details available upon request.
Jerry Toher, CEO of Consumer at Royal London Group, said: “Currently, the market for ‘Over 50s’ insurance plans does not serve customers well. In practice policies can be very inflexible and unfair. Although life insurance remains a very popular product – especially for people with low levels of lifetime savings, who want to leave a legacy after their death –it offers poor value for money for many customers. Sometimes customers and their loved ones are left with nothing despite paying out over the years, which is appalling. We are aiming to transform the market with a product that is fair, flexible and good value.
“We believe our offering is a real game-changer – better for customers’ pockets and peace of mind. Over recent months we’ve spoken to many customers, to get their input. They were very clear, and said they need flexibility and value for money. For example, premiums are returned if a customer dies in the first year, and customers can receive a cash sum on death even if they stop making payments.”