Essential Financial Protection Cover for Later Life

Life in your 50s, 60s, and beyond brings new priorities. You might be thinking about retirement, helping children financially, or ensuring your partner is secure if something happens to you. Perhaps you’re managing a mortgage whilst approaching retirement age, or you’ve finally achieved the lifestyle you’ve worked decades to build.

Whatever your circumstances, one question becomes increasingly important: ‘How do you protect everything you’ve built?’

Essential financial protection cover for later life helps you prepare for worst-case scenarios. Having suitable cover in place safeguards your family’s wellbeing, protects your home and maintains your lifestyle if health challenges arise. It also gives you peace of mind during what should be your most enjoyable years.

As a specialist advisor working with leading UK protection providers, including Aviva, Legal & General, The Exeter, LV=, Royal London, Zurich, and Vitality, I help clients understand which protection products make sense for their later-life circumstances.

Let me explain the four main types of protection that matter most in later life, how they work, and why they’re worth considering.

Life insurance provides a lump sum payment to your beneficiaries when you pass away or are diagnosed with a terminal illness. It’s the foundation of financial protection, ensuring your loved ones aren’t left struggling financially during an already difficult time.

Many people assume life insurance is only for young families with mortgages and small children. Whilst those families certainly need protection, later life brings different but equally important needs for life cover.

You might want to ensure your partner can maintain their lifestyle without your income or pension contributions. Perhaps you’d like to leave something for children or grandchildren, help with inheritance tax planning, or cover funeral costs so your family doesn’t have to bear that burden.

Life insurance in later life can also clear any outstanding debts, allowing your estate to pass to beneficiaries without financial complications.

Different life insurance structures suit various needs. Term insurance covers you for a specific period, which is helpful if you have a mortgage or other time-limited financial commitments. Whole of life insurance provides lifelong cover, making it suitable for inheritance planning or ensuring funds are available regardless of when you pass away.

Some policies pay out as a lump sum, whilst others provide regular income to your family over a set period, helping them manage ongoing living costs rather than receiving everything at once.

Getting life insurance in your 50s and 60s is absolutely possible, though premiums typically increase with age. Some providers, like The Exeter, specialise in offering cover to people with existing health conditions, which becomes increasingly relevant as we age.

The key is finding the right level of cover for your circumstances. You don’t need to over-insure, but having sufficient protection ensures your family is genuinely secure.

Critical illness cover (also called serious illness cover by some providers like Vitality) pays a tax-free lump sum if you’re diagnosed with a specified serious condition. This is entirely separate from life insurance, which pays out while you’re alive, helping you cope financially during treatment and recovery.

As we age, the statistical likelihood of serious illness increases. Cancer, heart attacks, strokes, and other major health conditions become more common in later life. Critical illness cover provides financial breathing room when you need it most.

Imagine being diagnosed with cancer in your early 60s. You might need to stop working, either temporarily or permanently, and medical appointments, treatments, and recovery could consume months or years. None of this is convenient or enjoyable, plus household bills continue arriving.

Critical illness cover gives you funds to manage during this period, such as paying the mortgage, covering living expenses, funding private treatment if desired, or simply reducing financial stress so you can focus on getting better.

Modern critical illness policies cover a wide range of severe conditions. Different providers offer varying levels of coverage, with some policies covering more conditions than others. Common conditions across all providers include major cancers, heart attacks, strokes, and multiple sclerosis.

More comprehensive policies extend coverage to conditions particularly relevant in later life, such as dementia, Parkinson’s disease, and other age-related serious illnesses. Some providers, like Vitality, offer the ability to claim multiple times if you’re diagnosed with different conditions throughout your life.

Even in later life, you might still have younger children at home, or you might want to protect your grandchildren. Many critical illness policies include optional children’s cover, providing financial support if a child is diagnosed with a serious illness.

This can be particularly valuable if you’re providing childcare for grandchildren or are financially responsible for younger family members.

Beyond the financial payout, many providers include valuable support services at no extra cost. These might include access to medical second opinions, rehabilitation support, counselling services, and legal advice. These practical benefits help you navigate difficult health situations more effectively.

Income protection provides a regular monthly income if you’re unable to work due to illness or injury. Unlike critical illness cover, which pays a one-off lump sum for specific conditions, income protection covers any illness or injury that prevents you from doing your job.

If you’re still working in your 50s or early 60s, your income is probably supporting your lifestyle, perhaps still paying a mortgage, and building pension savings for retirement. What happens if illness or injury stops you working for months or years before you planned to retire?

Statutory Sick Pay is minimal and time-limited. Many employers offer some sick pay, but it typically doesn’t last beyond a few months. Without income protection, a serious illness or injury could devastate your finances just when you’re approaching retirement.

Income protection bridges this gap, paying a percentage of your salary every month whilst you’re unable to work, continuing until you recover, retire, or the policy term ends.

Modern income protection policies recognise that different occupations face different risks. Office workers, manual workers, healthcare professionals, teachers, and self-employed individuals all have specific needs.

Some providers offer specialist products for particular sectors. For instance, policies designed for higher-risk occupations might have different premium structures but still provide comprehensive cover. Self-employed individuals can access cover without needing extensive income documentation, recognising the variable nature of self-employment earnings.

Quality income protection policies pay money, actively support your recovery, and help you return to work. This might include access to physiotherapy, counselling, vocational rehabilitation, and phased return-to-work support where you’re paid whilst gradually increasing your working hours.

This holistic approach means you’re more likely to recover fully and return to work successfully, rather than being stuck on long-term sick leave.

Income protection can be structured to cover you right up to your planned retirement age, ensuring you’re protected during those crucial final working years when your pension pot is still growing.

Mortgage protection is essentially life insurance specifically structured to repay your mortgage if you pass away or are diagnosed with terminal illness. Whilst it’s technically a form of life insurance, it deserves a separate mention because protecting your home is often a primary concern in later life.

Many people approaching retirement still have mortgages. Perhaps you downsized and took a new mortgage, remortgaged to help children, or have an interest-only mortgage where the capital remains outstanding.

If you pass away with an outstanding mortgage, your family may face difficult choices. They might need to sell the home, struggle to keep up with repayments, or use other assets to clear the debt. Mortgage protection prevents this, ensuring the mortgage is paid off so your family can keep the home.

Mortgage protection typically comes as decreasing cover, where the payout amount reduces over time to match your declining mortgage balance. This is cost-effective because you’re only insuring the actual amount owed.

Alternatively, level cover maintains the exact payout amount throughout, which might be preferable if you have an interest-only mortgage or want to ensure funds remain for other purposes after clearing the mortgage.

Couples often take joint mortgage protection, but the structure matters. A ‘joint life first death’ policy pays out once when the first person dies, then ends. This clears the mortgage but leaves the survivor without cover.

A ‘joint life second death’ policy only pays when both partners have passed away, which doesn’t help the surviving partner.

Because of these remaining ‘uncovered’ situations, many couples actually need two separate policies to ensure they each cover their share of the mortgage. Doing this ensures the survivor is protected and still has coverage remaining.

So, with four different types of protection available, how do you decide what you actually need? Always start with your priorities and circumstances.

You don’t necessarily need all four types of protection. Your circumstances, budget, existing employment cover, and financial priorities all influence what makes sense.

Many people in later life combine life insurance with critical illness cover, ensuring both death and serious illness are covered. If you’re still working and have a mortgage, adding income protection and mortgage protection creates comprehensive security.

Self-employed individuals often prioritise income protection since they have no employer sick pay safety net.

At Jane Jackson Financial Solutions, I work with a carefully selected panel of leading UK insurers and award winners, each offering distinct strengths. Some excel at covering people with existing health conditions, others offer comprehensive wellness programmes and rewards, and some provide particularly strong income protection options. Having access to these organisations means I can recommend the provider and product that are genuinely best suited to your circumstances, rather than offering one-size-fits-all solutions.

Modern protection policies include valuable features beyond the basic cover. Understanding these helps you choose policies offering the best overall value.

Guaranteed premiums stay fixed for the policy term, providing budget certainty. Reviewable premiums might increase (or decrease) based on the insurer’s claims experience, offering lower initial costs but less certainty.

Some policies automatically increase your cover amount annually, either at a fixed percentage or in line with inflation. This prevents your cover from becoming inadequate over time, though premiums increase accordingly.

Many insurers include support services at no extra cost, including health apps, GP access, counselling, rehabilitation support, legal advice, and more. These practical benefits can be extremely valuable when you need them.

Some policies allow you to convert to different cover types later without new medical underwriting or continue cover beyond the original term. These options provide valuable flexibility as your circumstances change.

If you’re considering essential financial protection cover for later life, the process is straightforward.

Once your cover is in place, you have peace of mind knowing your family, income, and home are protected. You can focus on enjoying your later life years without constant worry about ‘what if’ scenarios.

Essential financial protection cover for later life offers you the practical steps to safeguard everything you’ve worked for, ensuring your family is secure regardless of what life brings.

The proper protection depends entirely on your unique circumstances. What matters to you? What would happen to your family if you couldn’t work, or if something happened to you? What would give you peace of mind?

If you’d like to discuss protection options for your later life circumstances, I offer free initial consultations. We’ll explore what matters most to you and ensure you understand all your options before making any decisions.

Your later years should be enjoyed, not spent worrying about financial security. With the right protection in place, you can focus on what truly matters – spending time with loved ones, pursuing interests, and making the most of every day.

If you’d like to discuss your options for financial protection cover in a friendly, no-obligation consultation, I’d be happy to help. I can visit you at home in Staffordshire, the surrounding counties, or arrange a video call if you’re further afield.

Call me on 07990 836455 or get in touch here to book your free consultation.

Important Information

A lifetime mortgage is not suitable for everyone, and it is important to seek financial advice before taking any action. All other options available should be explored before choosing equity release.

Interest is charged on both the original loan and the interest that has been added, the amount you owe will increase over time, reducing the equity left in your home potentially to nothing. Please discuss with your family and beneficiaries.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Jane Jackson Financial Solutions is a trading name of Just Mortgages Direct Limited, an appointed representative of The Openwork Partnership – one of the UK’s largest Financial Advice networks with over 4,500 advisers nationwide.