Age limits on protection insurance.
23 August 2021
08 December 2021
In this week’s ‘5 things you should read’ we take a detailed look at age limits on protection plans.
Finding protection for younger clients is not likely to be a problem, but if the client is older, the age limits that insurers put on their policies may restrict the advisers’ choice. If children’s cover is included in a critical illness plan, insurers will set a minimum and maximum age between which the children of the life assured will be covered. In the business protection market the age criteria that insurers apply to their plans will have an impact on the suitability of plans. In this week’s ‘5 things you should read’ we take a detailed look at age limits on protection plans.
- Age limits for life and critical illness cover – how insurers compare
- What are the age limits for income protection insurance?
- How do Royal London’s new children’s critical illness limits compare?
- Who has the broadest age criteria for relevant life cover?
- Who offers business protection to older employees?
Age restrictions apply to many things that people can buy or do. Maximum age limits are less common, but they do exist where a decline in health and fitness due to age could be problematic. For example, obtaining life or critical-illness cover, as the deterioration in health as people age – which impacts on life expectancy – will increase risks for insurers and have cost implications for clients. In this insight we took a detailed look at the age criteria that insurers apply to their life and critical-illness products to determine which providers are most suited to older and younger clients.
Age criteria is a key part of insurers’ eligibility requirements for income protection and making this as broad as possible will inevitably widen its appeal. More people will be eligible to take out cover that will help them financially if the age criteria is inclusive rather than restrictive, with the potential to make use of other kinds of support as well if illness or an injury means they are unable to work. However, older people are more likely to become ill or disabled, making them a higher risk for insurers who need to balance risk with the need to make a profit. In this insight, we looked at the minimum and maximum age requirements for entry and at expiry to determine which insurers have the widest age criteria on their income protection plans.
Royal London announced last week a number of improvements to various aspects of their personal menu plan protection products, in particular an increase to the limits of both their standard and enhanced children’s critical illness cover. Amongst those changes were increases to the maximum cover finishing age for children. In this insight we examined in more detail what those changes mean and how they compare to the rest of the market.
Providing life cover that employee do not have to pay for themselves is a useful benefit that employers can offer, especially if staff have young families and mortgage commitments. Although an individual life policy that employees would pay for themselves will be cheap at a young age, tight budgeting or apathy may prevent them from going down this route. Relevant life insurance can be a great solution for smaller businesses who have too few staff to qualify for group cover, or who wish to offer a single death in service benefit to particular employee. Different age limits to individual life cover do apply though, as we covered in this insight.
Advisers can help to prevent business owners store up future problems for themselves by taking out various types of business protection. Unlike personal protection policies, business protection is taken out for the benefit of the business rather than the individual. In this insight we look at the age criteria that insurers apply to key person cover and shareholder protection, which are types of business protection policies.
Look out for future “Everything you need to know” articles where each week we will cover a different topic and provide you with the information you need to know to discuss the topics with your clients.
This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.