Life Insurance Death Benefits Lump Sums - Whole Life Cover
Whole Life Insurance - A protection cover plan that via definition as the name implies, is insurance guaranteed for the whole of your life, whenever you die. Whole Life Cover is the correct route with those looking for life cover that runs for the rest of your life, rather than term insurance, which only pays out if you die during the policy term. You may find if this plan was intended as a funeral insurance policy, it better to take out 2 separate life policies instead.
- Designed to pay out on death - whenever it occurs
- Benefits are currently paid out tax free on claim
- Whole Life Assurance Cover may be level or inflation linked
- Medical evidence may be required and a medical examination for those with health issues
- Premiums may be guaranteed or if investment based reviewable
- Maybe payable on death or earlier Terminal Illness
- Benefits can be set up to be payable into Trust
- Can be set up on sole or joint life basis
Whole Life insurance policies are designed to always pays out upon your death, so logically are more expensive than term life insurance plan as the risk is greater to the whole life insurance companies. Whole Life insurance Comparison price wise are therefore more expensive because it is certain that the life company will eventually have to pay the life sum insured.
2 types of Whole Life Assurance cover plans exist:
Investment based versus Guaranteed premiums
Rest of Life Assurance - Investment Based Premiums
Your whole of life premiums are invested into a fund to cover the cost of whole life insurance rates. Potentially if surrendered this plan may aquire a value.
This type of cover aims to balance the level of life cover with adequate investment to support the protection in later years and thus try maintain the original premium throughout life. This relies on the value of units invested in the underlying fund growing at a certain level each year. Poor fund performance or Increased fund charges could result in the premiums being inadequate and may have to be increased to maintain the same level of cover at review.
The initial premiums and the sum insured are designed not to increase for the first 10 years. After this initial period the plan is reviewed and if necessary the whole life plan premiums may be increased.
Note: We do not give advice or do investment based whole life insurance online quotes. We can refer you to a suitable quaified broker if you need help with this type of whole life products.
Rest of Life Insurance - Guaranteed Premiums
This type of whole of life insurance policy, as the name implies, has guaranteed premiums that are not investment based; they are generally none-reviewable premiums. These premium therefore stay the same throughout the plan but unlike the investment based cover above, have no surrender value. It can be set up on a single or joint life basis. The life assurance can be level or also index linked.
Whole of Life Assurance - Uk premiums will depend on the following: sum to be insured, your age, your health, your sex and whether you smoke or not. A non smoker is usually defined as someone who has not smoked for at least 12 months or taken nictotine replacement products. Premiums for women were lower on average as they tended to live longer but was made the same gender price since 12/12.
Check the quotes & Key Facts documents for your lifecover quotation produced.
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