How to avoid the 50-plus insurance rip-off

You might be in the 50-plus bracket for insurance deals, but expensive cover shouldn't be par for the course. However, recent research from watchdog Which? finds that life insurance and travel cover targeted specifically at over-50s can be a bad deal when compared with alternatives.

But there are ways to avoid getting ripped off:

1. Avoid gimmicks

Don't get blindsided by celebrity endorsements or free Parker pens and similarly, don't insure yourself for more than is needed. Many insurance salesmen are bonused to sell a certain volume of cover, points out insurance broker David Morton. "Establish your requirements if covering debt, personal income and or a specific sum for a loved one," he says, "and don't add bells and whistles to the policy that you don't need that will increase the premium."

2. If you're married, take out separate policies

Contrary to expectation, this doesn't double the cost, Morton says. "It alters the overall premium by around 10 per cent, but ensures that the policy is not cancelled for the second party to it if the first person suffers a claimable event".

3. Shop around for insurance

"It pays to shop around for various quotes and compare prices quoted with the cover and excesses to determine what is value for money," advises Mike Hallam of the British Insurance Brokers' Association(BIBA).

Remember that not all companies are on price comparison websites and you can sometimes get the best deals by going direct.

Some companies give their customers free rein to tell others about their experience through online ratings and reviews. Check these out, and look at the way the company has responded to negative feedback. Look at Aviva ratings and reviews, for example.

4. Do your own research too

As with any financial product, it's vital to understand what you are buying so you know how the product works and what it is designed to do. "A bit of research might reveal it not to be suitable for your needs after all," says Nancy Baynes of pension and insurance firm Royal London. The Money Advice Service has a useful, impartial guide.

5. You get what you pay for

Don't shop purely on premium, says Morton: the cheapest policies are often low cost because they have elements of cover stripped out. Check their flexibility.

Bear in mind that if money becomes really tight, you may need to reduce your monthly payments on a life insurance policy, says Nancy Baynes. "This will reduce the cash lump sum but it's better to continue paying a little something than nothing," she says, warning that only some providers offer this kind of flexibility.

6. Are your insurance payments fixed, or will they increase?

Consider whether you can afford your payments now and potential future increases. Some providers increase payments (and your cover) automatically, others let you increase at a time that suits you.

By the same token, don't pay forever. With regards to life insurance, check how long you have to pay for. "The choice is yours, but the poorest value products make you pay for the rest of your life," says Baynes.

Others, meanwhile make customers pay to age 90, even if they start at age 50 and some will offer you a shorter payment term, but then significantly increase how much you pay each month.

7. If you need to make a claim, consider whether you can afford the excess

The excess is the amount you would pay if you were to make a claim on your insurance. "Increasing your excess can make your insurance premium cheaper, but you'll receive a smaller pay-out in the event of a claim," points out Heather Smith, director of Aviva UK direct.

It's important to consider the service you might expect to get from your insurer in times of need. "This is when a good insurer comes into its own; expertise, skills and experience are vital in getting a claim paid quickly and life back to normal," explains Smith.

8. Consider an annual travel insurance policy

If being in your 50s equals more holidaying, all these pointers are valid for travel insurance too. It's worth considering an annual policy, as you only need to take (on average) two and a half holidays per year (including UK breaks) for this to be better value than buying single trip policies, says Rebecca Brown from AXA travel insurance.

These days, people travel with more gadgets, so check your valuables limit. "Make sure you're covered, and don't just buy the cheapest policy you can find," says Brown.

Get a travel insurance quote

9. Get impartial expertise

"We would always recommend the use of a professional insurance broker who can obtain alternative quotations and offer a client the best advice on their insurance requirements," says BIBA's Hallam.

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