The consumer champion found that on average, a 60-year-old man paying £15 a month into an over-50s plan for 30 years would earn a lump sum of just £2,980.
This compares to a cash Isa (4% AER) which would earn more than triple the amount over the same time (£10,313).
If a customer stops payments then they forfeit any payout or even the return of their premiums. This means that they're forced to keep paying money into the plan each month until they're 90.
For instance, a 60-year-old man with a monthly premium of £15 would pay a total of £5,400 by the time he reached 90. However, in some cases he could receive a payout of less than half that amount (£2,650).
So the longer you live, the worse value over-50s plans become.
Even worse, if inflation was to follow the same patterns over the next 25 years as it has done over the past quarter of a century, by January 2037 the real value of a plan paying out £3,450 could be less than half this in today's money.
Which? chief executive, Peter Vicary-Smith, says:
"For most people, over-50s plans are incredibly bad value. They're inflexible and, for the majority of customers, they will pay out far less than you have paid in.
"For those that are looking to leave their family a cash sum, our advice is to steer well clear of these plans, and to put your money into a cash Isa instead."
