Whole of Life Insurance

What Is Whole of Life Insurance?

Whole of life insurance is a policy that pays out a lump sum on death, just like term life insurance. Whole of life, however, will last for the duration of your life and is guaranteed to pay out whenever you may die no matter what age this is long as you maintain your payments.

Whole of life is more expensive than the more standard term insurance and should be used differently. The guaranteed payout can be of interest to many compared to term insurance, which if you live to an old age, may expire and not provide any payout at all.

Whole of life insurance will provide more stability to your later life and estate planning.

When should you consider whole of life?

Whole of life insurance can have a very important part to play as part of a wider financial protection package. Some examples of when Whole of life insurance and be helpful include:

• You want a guaranteed payout. Sometimes the financial cost and return of a policy is secondary to the peace of mind knowing that a particular person will receive a particular amount on your death. If this is the case no other type of insurance can guarantee this in the same way.

• You are likely to live into your 90’s. Many life insurance companies only offer cover until your mid to late 80’s. If you have a requirement for life insurance beyond this point then whole of life might be a sensible option, even if its for an overall smaller amount than when you were younger.

• You are looking for a very safe, guaranteed and tax efficient way of passing on wealth to the next generation.

• In some situations a whole of life policy can offer a greater return than cash savings, with greater tax efficiency and control and with no extra risk.

• When there are known expenses on death such as funeral expenses, whole of life can be a very good way of securing these funds no matter what happens between now and when you die.

Does Whole of life make sense?

In most situations and with good planning, standard life insurance will suffice. However, for some, the extra length and guaranteed nature of the policy helps create a steady financial foundation for loved ones that is worth the extra premium.