Why do grandparents get life insurance?
The reasons vary, but common motivations include:
- Covering funeral costs (average UK funeral now costs £4,000–£9,000)
- Leaving a tax-efficient legacy for grandchildren
- Helping with inheritance tax planning
- Paying for a grandchild's education or first home deposit
Can grandparents get life insurance?
Yes — options are available up to age 85 in the UK. The two main routes are over-50s guaranteed acceptance plans and underwritten whole of life policies for those in good health.
Over-50s guaranteed acceptance plans
These are the most accessible option for older grandparents. You're guaranteed acceptance regardless of your health, and premiums are fixed for life. The main limitation is the level of cover available (up to around £20,000 with most insurers).
Be aware of the waiting period — most plans won't pay the full benefit if you die within the first 1–2 years of the policy. However, they'll usually refund premiums paid during this period.
Whole of life insurance for grandparents
If you're in good health and under 80, an underwritten whole of life policy may offer higher cover levels and potentially better value if you live for many more years. Premiums are based on your health at the time of application.
Can I take out life insurance on a grandparent?
You can take out a policy on a grandparent's life if you have an "insurable interest" — i.e. you would suffer a financial loss if they died. Grandchildren can sometimes arrange cover with the grandparent's consent, though the grandparent must sign the application.
Writing the policy in trust
For grandparents wanting to leave a legacy to grandchildren, writing the policy in trust ensures the payout bypasses the estate, avoids probate, and can be directed to specific grandchildren.
Frequently Asked Questions
Most over-50s plans accept applicants up to age 85. Underwritten policies may have lower maximum ages depending on the insurer.
Yes, with the grandparent's consent and provided you can demonstrate insurable interest (e.g. financial dependency or contributing to their care costs).
It depends on the goal. A funeral plan fixes the cost of a specific funeral package. Life insurance gives cash that beneficiaries can use flexibly. Life insurance is generally more versatile.