AA 50 Plus Life Insurance
Automobile Association Insurance Services Ltd has launched a guaranteed acceptance whole of life plan for those 50 or over, underwritten by Friends Provident Life Assurance. The plan is available to UK residents aged 50-80 and premiums and acceptance are guaranteed (no medical questions or medicals). Premiums are payable until the life insured reaches age 90.
In the event of death in the first two years of the policy, the plan pays back 1.5 times the premiums paid only. After that, the full sum insured is payable on death. Minimum premium is £4.99 a month; maximum £49.99.
A male aged 60 paying £29.99 a month would get a sum insured of £6,209, a male aged 70 would get £3,419, and a male aged 80 would get £1,362. Premiums paid would exceed the sum insured payable after seventeen years three months, nine and a half years and four years nine months respectively.
As an incentive, customers get a £30 Boots voucher if they take out a policy (£40 if they are an AA member).
Plus points: Low cost life cover with guaranteed acceptance; Premiums stop at age 90; The 150% return on death in the first two years can make this an attractive small savings account for those with a terminal illness—but perhaps not if they live significantly longer than that.
Not so plus points: As with all plans of this type, someone in good health may expect to live longer than the time by which premiums paid exceed the sum insured—if they then stop paying, the policy lapses without value; No trust option; Online quotes are all based on premiums that end in 99p.
Website: http://www.theaa.com/insurance.
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