Whole of Life Insurance cover will pay out a lump sum whenever you pass away, as long as your premiums are paid up to date.
Reasons why people arrange Whole of Life policies:
- To cover their funeral costs or to leave a lump sum for their nearest and dearest.
- Upon death, Inheritance Tax Liability (IHT) is paid on any part of your estate that exceeds the ‘nil-rate band’, a threshold that currently stands at £325,000 (ie £650,000 for couples). The current rate of IHT is 40%. A Whole of Life policy could be used to help cover a potential IHT Liability.*
Depending on the insurer, premiums are either paid throughout your life or until a prearranged age (when premiums stop but cover continues).
The premiums for Whole of Life Insurance policies tend to be more expensive than those of Term policies, as they are guaranteed to pay out. With a Term policy the benefit will only be payable if you pass away before the cover’s end date.
It is wise to consider index-linking your policy, which will help protect the benefit from the effects of inflation.
A ‘medically underwritten’ Whole of Life Insurance policy should not be confused with a ‘Guaranteed Acceptance’ Over 50’s plan (more information below).
If you cancel or stop paying your premiums, you won’t get any money back. There is no investment value in the Whole of Life Insurance policies which we arrange.
To speak with one of our advisers, who will be happy to discuss your options and provide you with a quote (which will always be confirmed in writing) from one of the UK’s leading Life Insurers, please call us on 0800 644 4468, or choose a call back and we will contact you at a convenient time. Call me back
*The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.