Whole life insurance is a type of life insurance. It pays out a lump sum to your family whenever you die, rather than within a particular time frame. It’s sometimes called whole life assurance.
How does whole of life insurance work?
When you set up your whole life insurance policy, you’ll have to choose what payout you want. Then you’ll start paying a monthly premium.
If you carry on paying your premiums, the policy will pay out to your family when you die.
Whole life insurance rates are usually higher than with other types of life insurance, because the policy lasts your entire life. That means you’re almost guaranteed a payout.
How to get the best whole life insurance
When you start looking for whole life insurance, you’ll need to find the whole life insurance policy that offers you the cover you need, at the best price. This will mean looking at a range of different whole life insurance companies, UK wide, that offer life insurance.
Things to consider when considering a whole of life insurance policy:
Amount of cover: Before you start looking at whole life insurance, think about how big you want the payout to be. For whole of life insurance, UK companies will mostly let you choose any amount but, the higher the payout, the more expensive the monthly payments.
Your age:You’ll also need to think about how your age could affect the price of your monthly payments. The older you are, the more expensive your whole life insurance will be.
Once you’ve thought about these points, you can do a life insurance comparison and get the best quotes for whole of life insurance, UK wide. You’ll be able to find quotes online. Just click on ‘get quotes at the top of this page’.
How much whole life insurance cover do I need?
The amount of cover you’ll need from your whole life insurance might change as you go through life. If you pay off your mortgage, for example, your family might not need as much. Or, if you start having children, you might decide to get whole of life insurance that offers more cover.
Your insurer might let you review your whole life policy after a set amount of time, such as 10 years. You should talk to the life insurance companies about this option when you set up your whole life policy. Even if you don’t want to change how much cover you have, you might find that your premiums still go up, due to your changing age and health.
What types of whole of life insurance are there?
There are three main types of whole life insurance UK companies offer.
Non-profit whole of life insurance is when you pay a set premium throughout your life. Your insurer then pays out a fixed cash sum when you die.
With-profit whole of life insurance is when you pay a set monthly premium which your insurer invests on your behalf. The payout when you die is based on how the investments perform, so you could end up with a bigger or smaller payout.
Unit-linked whole of life insurance is when your monthly premiums are based on the size of the payout you want. The insurer invests your premiums into the stock market. This means you might need to pay more in, if the investments underperform.
Does whole of life insurance always pay out?
Yes, mostly. The only reasons your whole life insurance might not pay out would be if you lied when you set up your policy, or your cause of death wasn’t covered. For example, if you don’t tell your insurer about your pre-existing medical conditions or your family’s medical history, you might not get a payout.
It’s important to check which causes of death are covered by your policy before you apply. Different life insurance companies and policies have different exclusions that mean you won’t get a payout. The exclusions might include death linked to alcohol or drug abuse.
Should I get whole life insurance?
You might decide you only need life insurance for a set amount of time. For example, you might want it while you are still paying off your mortgage. If that’s the case, then whole life assurance probably isn’t a cost-effective option for you because it’s a permanent life insurance. You could think about getting term life insurance instead.
What are the pros and cons of whole of life insurance?
The main benefit of whole life assurance is that it can help your family out with a lump sum of money when you die. It could also help them to cover the cost of any inheritance tax they’d be charged on your assets.
On the other hand, if you take out whole life insurance, UK companies could charge you more for your policy overall than you get out when you die. Also, your family won’t get a payout if your cause of death isn’t covered in your policy.
How much does whole life insurance cost?
The price varies depending on your age, medical history, and how much cover you want. Here are some ideas on how to cut the cost of life insurance.
You could consider getting a joint whole life insurance policy as it’s usually cheaper. But remember that these only pay out once – after the first person on the policy dies. A joint policy is usually cheaper than two individual policies.
You’ll probably find it harder to get accepted if you have a poor medical history. Health issues can also make whole life insurance more expensive. You should get as many whole life insurance quotes as possible, until you get accepted for the cover you want.
How do I get whole of life insurance?
Once you’ve decided how much cover you want, you need to do a life insurance comparison to get whole life insurance quotes.
It’s a good idea to get as many whole life insurance quotes as possible to find the cheapest monthly premiums. Click on ‘get quotes’ at the top of this page and fill out the details to get your life insurance comparison.
But when you compare life assurance quotes, you shouldn’t just immediately buy the cheapest option. You’ll need to choose carefully to make sure you get one that gives you the cover you need.