The term of a life protection plan will depend on a number of different factors. Where cover is in place to protect against a mortgage the term of the plan will generally mirror the term of the liability, however where the plan is to provide family protection this might be set to match the age at which the client expects to retire. For the vast majority of clients matching the term of the life cover to their specific needs will not be a problem. Where an adviser is dealing with an older client however, restrictions on maximum ages might be a factor on policy selection. In this article we look at the maximum ages that insurers will provide life cover to.

When considering life cover for older clients there are two factors to be aware of. The first is the maximum age at which the policy will offer terms (maximum age at entry) and the second is the maximum age to which the policy will cover a person (maximum age at expiry).

The ages these will be set at are often dependent on the type of plan and the basis that is set up on.

Plans that offer a simplified underwriting process are likely to set their maximum ages at lower ages. These plans aim to provide a more efficient application process by asking less health questions and providing faster cover for those with no medical issues. As such the maximum ages will generally be lower as they are not aimed at older clients where more underwriting may be required to properly assess the risk the client may pose.

The basis on which the plan is set up may also provide variations in the maximum age. A number of insurers will set different ages at which the plan can be set up dependent on whether it is based on level cover, decreasing cover or increasing cover. Both AEGON and Legal & General set their maximum age at entry at a lower age than level of increasing cover. LV= on the other hand set the maximum age at entry for increasing cover at a lower age than level and decreasing.

*The Royal London Diabetes Plan is only available on a level term basis

**The Exeter life plan is only available on a level or decrasing basis

In terms of the maximum age at expiry, there is less variation between level, decreasing and increasing cover. Only LV= set a different age between level/decreasing cover and increasing cover.

*The Royal London Diabetes Plan is only available on a level term basis

**The Exeter life plan is only available on a level or decrasing basis

The FCA’s insight website states that in 2018 30% of all borrowers will be over the age of 66 when their mortgage matures up from 26% in 2015. Whilst this suggests that more people may require protection into later life, 94% of these borrowers will be between 66 and 70 when their mortgage ends. As such this suggests that the maximum ages are unlikely to be an issue when protecting against a mortgage unless a simplified protection plan is being used. See here to see the full data)

There are however an increasing number of people who either choose or need to remain in work past their 70s. For those that choose to do so there may not be a protection need, however those that need to work from a financial perspective as they do not have sufficient retirement funds are more likely to require life protection especially if they have a partner or significant debt.

There are many issues that advisers may face when looking to obtain cover for older clients. With age often comes more health issues and as such underwriting may be more complex. If the protection need has a set term due to either a liability or an age at which they will retire then it is ideal for their cover to cease at this point. Understanding which insurers will offer cover to these ages may save valuable time. If this extends beyond the age at which insurers might be willing to offer within their term plans then a whole of life plan may be more appropriate.