What is whole of life insurance?
A whole of life insurance policy guarantees to pay out a cash lump sum to your beneficiaries after you die. You continue to pay premiums for as long as you live, hence the name whole of life. Whole of life insurance.
This differs from the more common term-based policies, which are only valid for a specified period of time (or term). This means premiums are only paid during this term, but if you do not die within this time frame no pay out is made and the policy expires.
As a result, whole of life cover is sometimes referred to as whole of life assurance because your policy is assured to pay out at some point, provided you continue to pay your premiums.
The simplest kind, and the type we sell at Reassured is known as non-investment. Here you pay for policy cover until you pass away, at which time your loved ones receive a guaranteed cash lump sum.
There is also an investment whole of life option, which we do not sell. Here some of your premium is invested by the insurer and the final pay out sum is dependent on how the investment part of your policy performs.
Is whole of life insurance for you?
As a result of a pay out being guaranteed, assuming you pay your premiums, the monthly cost is generally higher compared with term-based policies offering similar coverage.
Whole of life policies are best suited to those who want the certainty of a pay out, as well as for those who have the funds to continue paying their premiums well into old age.
As these policies last as long as you live, it is also a good option if you do not want to continue renewing cover. Once you have taken out a whole of life policy, you should not need to worry about it ever again, even if you fall ill.
On occasions, whole of life is employed as an extra level of protection, over and above a term-based policy, which for example could protect your property. Leaving your whole of life cover dedicated to providing an inheritance or to cover rising funeral costs.
5 year term life insurance
It depends on your personal circumstances, budget and what it is you want to protect. There are various policy options available; over 50 plans, term-based cover or even funeral plans.
We compare all of these options with whole of life insurance below.
Why you may want whole of life insurance
The cost of whole of life insurance
Whole of life vs over 50s plan
Whole of life vs term-based life insurance
Life insurance vs life assurance
Whole of life vs a funeral plan
Investment vs non-investment whole of life policies
Guaranteed vs reviewable premiums
Waiver of premium & critical illness cover
Why might whole of life cover not be suitable?
Write your whole of life policy in trust
Whole of life insurance in summary:
Guarantees to pay out a fixed cash lump sum
If fit and healthy could provide greater coverage than over 50s plan
You will not need to renew a policy or take out a new one in later life
Monthly premiums can be fixed or reviewable
Pay out can provide an inheritance, pay for funeral or cover inheritance tax
Can be written in trust to avoid 40% inheritance tax and probate
Could be set up as a joint policy, (to pay out on either the first or second death)
Optional waiver of premium, terminal and/or critical illness elements.
Premiums more expensive than term policies
The application involves some health-related questions or medical
Difficult to secure cover if you have had health problems
You may pay your premiums well into old age
If you stop paying your premiums your cover will cease.
Why use Reassured to compare whole of life insurance?
We will scan the market, finding you the most competitive whole of life quotes
16,500+ people cannot be wrong! We have an ‘Excellent’ average Trustpilot rating of 9.6/10
We are completely independent and never charge you a fee for our service
There is absolutely no obligation to take out the cover we find
We are non-advised – which means we listen to your unique circumstances and find the most suitable policies.