Whole of Life
With whole of live cover, the guaranteed sum assured is paid out of the death of the policy holder; this cover is more expensive than Term Assurance because a death claim is certain to occur.
An agreed proportion of your monthly premiums are invested by the Assurance company and the returns help to fund the final pay out. Subsequently, both the monthly payments and the sum assured payable on death are subject to review and change.
The two main types of whole of life Assurance are ‘balanced cover and ‘maximum cover’.
About Whole of Life Assurance
Whole of Life Assurance is the only type of life cover that will guarantee to pay a lump sum on your death. This is because it is the only type of policy that guarantees to remain in force (providing you continue to pay the premiums) for the rest of your life.
Whole of Life Assurance or Assurance
The word "assurance" is used for policies that are guaranteed to pay-out provided the premiums are paid. The only type of policy that fits this strict definition is Whole of Life Assurance as this continues until you die, whenever this maybe - so to call it "Whole of Life Assurance" is technically incorrect!.
The word Assurance is used for policies which will pay-out only in certain circumstances, which means if you die during the policy term. If you outlive the term there is no pay-out (like a car Assurance that only pays out on an accident or theft)..
Uses for Whole of Life Assurance
Providing your loved one(s) with a lump sum on your death
If you die your partner may need a cash sum to help pay the bills and replace any lost income you may have. Whole of Life Assurance can provide this valuable peace of mind
Providing a lump sum to pay for your funeral and to pay off loans
The average cost of a funeral is around £7,300. We can provide the peace of mind that your loved ones won’t be left with this bill to pay after you have passed away.
Providing a lump sum to pay an Inheritance Tax bill
This could mean that assets which could include the family home don’t have to be sold to realise the cash required to pay the Inheritance Tax. The Inheritance Tax rate is 40% and this is charged on all estate assets in excess of the nil rate band, which is currently £325,000 for a single person