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What is Whole of Life Assurance?


Becky Simmonds,
25 April 2022

Reading time: 5 minutes

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Whole of Life Assurance is a type of life insurance policy which ensures that, no matter when you die, your loved ones will receive a lump sum pay-out from your insurer. This is in contrast to level-term life insurance, which only pays-out should you die within the term of the policy.

The attraction of Whole of Life Assurance is that you will be covered for your entire life and whenever you pass away, your policy will pay out.

A whole of life policy could be right for you, if you want to be safe in the knowledge that your loved ones will receive a fixed lump sum so they can maintain financial stability and comfort in the most difficult time.

What does Whole of Life Assurance cover?

Whole of Life Assurance is an excellent way to protect the things that mean the most to you.

It pays-out a lump sum of money upon death, that your dependants can use to cover any financial commitments. These could typically be funeral costs, mortgage payments, outstanding debts, in some cases for inheritance tax purposes, or just as a gift.

What are the benefits of a whole of life policy?

What are the benefits of a whole of life policy?

  1. Lasts for the whole of your life - Not all insurance policies last for your entire life, but this one does! so as long as you pay your premiums you'll be covered.
  2. Ensure security - having a policy which will pay out whenever you die in the future can provide a great deal of emotional and physiological comfort, for both you and your loved ones.
  3. Trust options - By placing a whole of life policy into trust, you can make sure that the money paid out from the plan, goes exactly where you want it to. Whole of life cover is often used for inheritance tax planning purposes.

What are the disadvantages of a Whole of Life policy?

  1. The cost - whole of life cover is typically more expensive than “term” life insurance. The insurer knows that they will have to pay out at some point in the future, so this is reflected with a higher monthly premium.
  2. Payment period - with whole of life policies, you're normally required to pay the premiums until you pass away. If you cancel you plan, or have to stop paying the premiums, then you may get nothing back and your cover will end.
  3. Reduced flexibility - Depending on the provider, you might not have the ability to change key elements of your plan once it's started. For example, increasing or decreasing your cover amount. So, it's best to speak with a consultant and know what the small print says.

How much does Whole of Life Assurance cost?

How much you pay for Whole of Life Assurance will depend on your individual circumstances. The number one factor that will affect the cost of your premiums is likely to be how much cover you would like to have. Other things insurance providers may consider is down to a host of factors about you, including your age, smoking status and medical history. As with other insurances, the higher the risk, the higher the premium.

How much Whole of Life Assurance do I need?

The amount of whole of life cover you require will depend on your financial goals and needs. When determining the amount of cover required, consider how much your dependents would need to pay for all the necessary outgoings and what you can afford each month.

Speak to an expert

Insurance planning, including Whole of Life Assurance can be a complex area, so it's important you consider talking to a specialist and finding out about which life insurance type suits your needs.

Reviewing life insurance on a regular basis is a good idea. QuoteSearch can still help if you have cover. Why not fill out our simple form, then chat to a consultant.

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