Whole of Life insurance is also known as life assurance, because it differs from the typical life insurance policies. The type of policy guarantees a pay-out, no matter when you pass away.Start a Free Quote
Whole of Life insurance is also known as life assurance, because it differs from the typical life insurance policies. The type of policy guarantees a pay-out, no matter when you pass away. Here we take a closer look at what Whole of Life insurance is and how it can protect you and your loved ones.
This section will look at:
· What are the different types of Whole of Life insurance?
· Which is best; Term insurance or Whole of Life?
· Whole of Life and inheritance tax
· Do you need a medical with Whole of Life insurance?
There are a number of reasons why you might take out Whole of Life insurance. There are two main types, known as balanced cover and maximum cover. Balanced, or standard, Whole of Life insurance means your premiums will stay the same and you have a fixed cash pay-out amount.
Maximum cover means your cover is linked to an investment fund. Your premiums will be reviewed and can change depending on how the investments are performing.
Whole of Life insurance can be used for a number of purposes. One of the most common purposes for Whole of Life is to contribute towards funeral expenses. This ensures a lump sum is paid out so your loved ones have a helping hand in taking care of the cost of the funeral arrangements.
Both Whole of Life insurance and Term insurance provide different types of protection, and it can depend on your needs. Term insurance is most suitable for covering financial commitments that have a time period. This can include a mortgage, loan or supporting children until they are older.
Whole of Life insurance can provide financial support under circumstances that won’t change, such as a funeral, unpaid pills or paying off inheritance tax.
Whole of Life insurance is typically more expensive because it guarantees a pay-out, and you pay premiums for a longer period of time.
Whole of Life insurance is very popular in helping families to pay off an inheritance tax bill. The tax has to be paid before your family can get access to your estate. This can put a lot of financial pressure on your loved ones, as they can’t access the money in your estate to pay the tax bill.
Whole of Life insurance can help to provide the necessary funds to clear the inheritance tax bill. It’s important to note that the policy should be written in trust to achieve this.
When you take out most types of life insurance, you are asked a few basic questions about your health. This helps your insurer to know whether you need to attend a medical exam. You’re likely to be asked to attend a medical exam if you are high risk; for example if you are older or you have a pre-existing condition. It doesn’t mean you’ll be refused cover, just that your insurer wants to know a little more before calculating your premiums.
However, you can access life insurance without needing to go through this process. Over 50s Whole of Life insurance is one such example, as it guarantees acceptance. It is one of the few types of life insurance you can take out without answering medical questions.
** Premiums and payout based on a healthy non-smoker who is an office worker and doesn't have a hazardous lifestyle up to the age of 65. The premium shown is based on Aviva's Income Protection + Plan and is subject to a full underwriting process. Prices are correct as of January 2022.
This calculator is for informative purposes only and is not to be taken as financial advice, for accurate financial advice please consult with an advisor from Caspian Insurance.