Whole of Life Insurance

Whole of Life Cover is unlike other types of life insurance.

As the name suggests, it lasts for life and doesn’t end once you reach a certain age, giving you the ability to leave behind financial support.

It can also be used to insure against the inheritance tax that your family have to pay on your estate. With the appropriate level of cover in place, it could take care of the tax bill, so your loved ones get everything you leave behind.

There are many benefits of a whole-of-life policy. These include:

Guaranteed payout of a lump sum, whenever you die.

This is different to a term life plan which will only run for a limited term eg to age 65 years. If you were to die after the term ends, your policy will have ended and you won’t have any cover.

The benefit amount can be used to:

• Cover your funeral costs
• Leave a lump sum gift
• Be used to help cover a potential IHT Liability*
• A whole of life policy is medically underwritten, so premiums will usually be cheaper than taking out a guaranteed over 50’s plan, making it more cost-effective.
• Most whole-of-life policies can include an Index Linking Option which ensures the sum you are insured for keeps pace with inflation. This can be particularly important for clients looking for a policy to pay for funeral costs upon their death. Please note the monthly premium also increases as the sum assured increases so it’s important to ensure that including this option is affordable.
• Covered from day 1 – no 1 or 2 year bedding in period like most over 50’s policies.

*Upon death, Inheritance Tax Liability (IHT) is paid on any part of your estate that exceeds the ‘nil-rate band’. The ‘nil rate band’ threshold currently stands at £325,000 for an individual or £650,000 for a couple. The current rate of Inheritance tax rate is 40% above this amount.