You're Too Old For Life Insurance!

Anyone with dependents should carry life insurance but did you know that rules are different if you need cover beyond the age of 70?

Do you think 62 is too old to have a baby? Various newspapers recently covered the story of the oldest woman in Britain to have a baby after Dr Patricia Rashbrook gave birth to a 6lb 10oz boy amid criticism that it was selfish of her to have a baby at her age.

She and her 60-year old husband have sensibly made plans for younger friends to act as surrogate parents should anything happen to them while the boy is under-age, something I happen to think all parents of young children should do. In the same vein, I also think parents should carry life insurance to help provide for their dependents should they pop their clogs before the kids have grown up.

The problem Dr Rashbrook and her husband will have though is finding a life insurance policy to cover such an eventuality.

Financial advisers specialising solely in insurance products are not allowed to sell fixed-term life insurance cover to clients who would reach 70 and beyond while the policy is still in effect. It's known as the 'age 70 rule' and it means, for example, that a policy taken out by a 50-year-old for 25 years is subject to different rules than if the policy were taken out by someone over the age of 70. Only advisers regulated by the Financial Services Authority for investment advice are permitted to sell the latter - something that makes policies more expensive and harder to find.

As it happens the Financial Services Authority has decided to review the regulations - a move that has been widely welcomed by an insurance industry fed up with having to work out whether they're allowed to sell certain types of life insurance to clients.

Of course, regardless of Dr Rashbrook's situation, there are no guarantees that younger parents would live any longer anyway. And yet, according to the latest research from Co-operative Insurance Society (CIS) nearly half of the UK population do not have any form of life cover in place.

It's fine to do without life cover when you have no dependents but for those who do, CIS reckon you should have at least £150,000 worth of cover in place for each dependent. The good news is that premiums for level term insurance have fallen quite dramatically in recent years.

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