Whole of Life

What is Whole of Life cover?

Whole of life is as the title would suggest, lasts for the whole of your life and pays out on death.

There are two types of whole of life policies.

Non-profit whole of life insurance, also known as balanced or standard cover.

Investment based, otherwise known as maximum cover.

With balance or standard cover the premiums you pay will stay the same throughout the time your policy is in force.

Even if your health should deteriorate over time there will be no increase in payments and the benefit amount will stay the same.

A defined fixed lump sum is agreed as the benefit payable by the insurer when you die.

An investment based or maximum cover whole of life policy is linked to an investment fund either a with profit or unit linked.

Due to the two options with this type of protection some companies will state that there are three types of whole of life insurance options.

The insurer links the whole of life policy to an investment to generate funds for the eventual pay out.

Premiums are reviewed periodically, after 10 tears, then every 5 years until aged 70 and then yearly.

If the investment is not performing as well as the insurer expected, premiums could increase or the benefit level could be decreased.

These policies may seem cheaper at the outset but over time it is likely the cost could crease significantly.

At You 1st Mortgages, our advisers will only advise on balanced or standard whole of life insurance.

If you have any questions regarding any of the products you find information about on this site please feel free to contact us and we will do everything we can to assist you.

Below are links hopefully answering any questions you may have.

Why are whole of life policies useful?

Whole of life policies are useful as you’re guaranteed a payment upon death. As well as death benefit provided, most policies can also contain a savings component which can increase in value over the term, usually at a fixed rate. These policies are usually used to cover any funeral expenses upon death of the insured.

Should I speak to an adviser for my whole of life assurance?

Speaking to an adviser is recommended to determine what cover is most appropriate to you and your circumstances. This provides security as apposed to a comparison website as they are not advising as such what type of cover is best for you. 

At You 1st we guarantee aftercare which is not usually provided by larger insurance firms, giving you peace of mind that you can always access the right assistance and guidance when it comes to reviewing or claiming on your policy. 

Do I pay tax on the benefit from a whole of life policy?

If your fund is in trust(held within a private legal arrangement), the beneficiaries of the trust will be subject to inheritance tax(IHT) if the fund’s value exceeds £325,000.

Although a whole of life plan can acquire a cash value its primary purpose is to provide financial protection and should not be seen as an investment vehicle.