It has been revealed that a major shopping brand which offers life insurance services is planning to release a new policy for its customers.

The group will join up with another popular life insurer and create a life insurance plan for clients over 50 years of age.

According to research, the over 50s place "family wellbeing" high in their list of priorities, however, over half have no life insurance cover in place.

It is thought that many have recently dropped such cover because of the economic downturn, in an attempt to save money.

The shopping organisation stated that it has chosen the life insurer to collaborate with because of a shared ethic of putting customers first and the policy offers an optional guarantee that premiums will not at any time surpass the amount that could be paid out.

The group’s head of insurance and savings, Gideon Ingham, says: "We know that many of our customers with children or grandchildren would like to leave some money behind for their loved ones, help make their lives easier, shield them from funeral expenses or even just leave a legacy."

He added: "That's why we've teamed up with (them) a provider that shares our ethos of putting customers at the heart of everything we do."

This financial product will be available in-store, online and over the phone. The franchise is launching an advertising campaign to take the new offer to its customer base, as it aims to triple the recipients of this cover.

Saving shock

Despite over 50s getting a new discount, life insurance sales are still being hit with negativity, especially as one grandmother recently lost thousands in a life insurance plan.

The grandmother saved more than £6,000 over 17 years for her grandson, but was shocked to hear that she will get back a third less than she saved.

Until 1994, the insurer she saved with promoted the Child Plan as a better alternative to traditional savings accounts for those wanting to set aside money for their loved one’s future.

The plan stated: "Flexibility, investment growth and protection are the keys to the [...] Child Plan." However, the reality is in fact not as glossy.

The 85-year-old contributed more than £6,120 to the plan in £30-a-month instalments over 17 years to help with her grandson’s university expenses. However, when the plan matured in July 2009, it only paid out £4,067. Had she put the money into a savings account, she would have £9,884.

When the grandmother bought the policy, the insurers stated her grandson would receive £6,860-£9,430 on maturity. This was based on inflation between 7-10%.

Robert Reid, from a financial advisor firm commented: "This is a basket case of a policy [...] when a plan tries to do too much it usually ends up doing everything badly."

However, the insurance firm responsible defends its policy.

A spokesperson stated: "Investment returns are positive, but not as high as expected 17 years ago. The world has changed dramatically in that time but the returns of the fund stand up.

"The life insurance element is extremely valuable and you could see how this would appeal to a grandparent taking out an investment for their grandchild."