Whole-of-life insurance

Protect your wealth and provide for your family when you die

Whole-of-life insurance is a policy designed to cover your entire life, ensuring a specified payout upon your death, no matter when it occurs. Some insurers also offer the option to include critical illness coverage as part of an integrated policy when purchasing life insurance.

This type of insurance is ideal for those looking to leave a legacy for their family, provide Inheritance Tax provisions, or protect their business after they’re gone. Due to the guaranteed nature of the eventual payout, whole-of-life policies are more expensive than term insurance policies, which only provide coverage for a specific time frame.

Inheritance Tax Solutions with Whole-of-Life Insurance
A whole-of-life policy can serve as a valuable tool for addressing potential Inheritance Tax liabilities. Establishing a policy to cover anticipated taxes ensures that a more significant portion of your estate is passed on to your beneficiaries.

By placing the policy proceeds outside of your estate and paying premiums throughout your lifetime, a whole-of-life policy could help reduce your estate’s overall value and minimise future Inheritance Tax obligations.

Policy options for your unique needs
Various types of whole-of-life insurance policies are available, each offering distinct features and benefits. Set payout policies guarantee a predetermined amount upon death. Investment-linked policies base payouts on investment performance through unit-linked funds or with-profit policies that offer bonuses. Some policies require premium payments until death, while others become paid up at a specified age and waive future premiums.

Many whole-of-life policies include an investment component and a surrender value, although surrendering the policy results in a loss of coverage. Premium reviews typically occur after the first ten years and every five years after that. Policies without an investment component and with guaranteed or investment-linked premiums are also available from select providers.

Navigating reviews and coverage options
Protection levels are generally guaranteed for the first ten years, after which a review determines the future of your coverage. If the review concludes that your current protection level can be maintained, it will be guaranteed until the next review date.

However, if the review reveals that the same level of protection cannot continue, you’ll have two choices:
Increase your premium payments
Keep your payments the same and reduce your level of protection

Whole-of-life policies offer different types of cover, such as maximum cover, which provides a high initial coverage level at a lower premium, or standard cover, which balances life insurance with sufficient investment to support the policy in later years.

Ultimately, the type of whole-of-life insurance policy you choose should align with your unique financial goals and circumstances, providing peace of mind and protection for the entirety of your life.