Whole of life cover guarantees that the insurer will pay out a lump sum to your loved ones whenever you die, rather than within a specified time frame.
Another commonly used name for this type of policy is whole of life assurance.
How does whole of life insurance work?
When you set up your policy, after choosing the payout you want, you will start paying a monthly premium.
If you continue paying your premiums, the policy will pay out on your death, whenever that is.
How to get the best whole of life insurance
The best policy will be the one that offers you the cover you need for the cheapest price.
Before you start getting quotes online, think about:
How much of a payout you want: Most companies let you choose any amount, but the higher the payout you choose, the more you pay in monthly premiums.
How your age may affect your premiums: The older you are, the more expensive your whole of life policy will be.
The amount of cover you need may vary over time. For example, if you pay off your mortgage, or your children move away from the family home.
If you want the option to review your policy after a set term, like 10 years, check with the insurer to see if they offer this option.
What types of policy can you get?
There are different types of whole if life insurance, including:
Non-profit whole of life insurance: You pay a set premium throughout your life and the policy pays a fixed cash sum when you die.
With-profit whole of life insurance: You pay a set premium, which your insurer invests on your behalf. Your payout will be based on how the investments perform.
Yes, there is a low cost whole of life insurance, which invests your premiums, like a with-profit policy. You get a guaranteed payout, or the investment value, whichever is higher when you die.
These policies are often cheaper than other types of whole of life insurance policy.