Whole of life insurance, also known as whole of life assurance or is often abbreviated as WOL, is a level policy that guarantees to pay out a fixed lump sum when you pass away.
It will remain in place for the rest of your life (there is no expiry date), as long as you pay all of your life insurance premiums in full and on time.
There are other life insurance policies available, such as term life insurance, which people often get if all they want is to be covered while their children are still dependant on them or alongside a repayment mortgage. For these requirements, there would need to be a pre-agreed time frame with the policy.
If potential policyholder’s want to be secure in the knowledge that they are always covered and want a guaranteed payout when they pass away, then a whole of life plan would be most suitable*.
When you take out a whole of life insurance plan, a premium is quoted by one of Quick Quote Life’s trained advisors. The premium depends on the sum insured, your situation and your preferences, and you can either pay your premiums monthly or annually. Then once you pass away, the pre-agreed lump sum will be paid out to your loved ones*.
You must ensure that you remain up-to-date with your premiums in order for your cover to remain in place and for you to continue staying securely protected.
Something that may put people off is the cost. With death being inevitable, there is a greater risk for insurers as they will have to pay out eventually. For this reason, a WOL insurance cover plan works out significantly more expensive than a ‘fixed term’ policy.
It all completely relies on the type of policy you invest in and the size of the agreed pay-out. This is the main reason why getting advice on the matter and understanding all the terms and conditions of your life insurance policy beforehand is crucial. For a quick quote on life insurance speak to an advisor using our free phone number
At Quick Quote Life, the type of insurance we provide for whole of life is known as guaranteed cover. With this, the premium amount you start off paying will remain the same for the whole policy term. You will also have an option to index link your policy, meaning that both the amount you pay and the amount that will pay out will increase every year in line with inflation.
As with any insurance plan, there are many reasons for choosing to commit to a whole of life cover policy.
People mainly invest in this type of insurance plan to help pay towards funeral costs, which many don’t think about saving for. Funerals can cost as much as around £4,000, if not more, depending on the needs and personal preferences of you and your loved ones.
Many opt for WOL because they want to have protection in place for future inheritance tax planning. When someone passes away, inheritance tax is placed on the deceased’s estate and must be paid off. The estate consists of your property, money and possessions. For those whose estate amounts to over £325,000, then inheritance tax is incurred. If you are planning to leave a large estate behind, then you may want to take out a WOL policy to help cover this bill. This way, your loved ones would be able to receive everything you have left behind without having to sell anything or fork out money from their own pocket.
Another reason for taking out whole life cover is that a policyholder may want security if they have a child with a disability. If and when death occurs, this policy would leave their offspring with some financial benefit in getting care once the parent(s) is/are no longer here.
Although it works out more expensive than other insurance cover plans, it should be seen as a form of investment, as it ensures a legacy to be left for your family and for situations like these.
When you are over 50, you could look into an over 50s life cover policy, which is similar to the whole of life plan, but requires no medical checks. Although this could be less time-consuming, it usually works out that the pay-out isn’t as much as what your loved ones would receive with the WOL and there is also a 2-year deferment period; meaning that if you die within this time frame, a lump sum won’t be paid out.
However, there are 2 benefits of over 50s cover in the first 2 years. Firstly, 150% of your premiums would be reimbursed if death did occur during this period. Also, if you died as a result of an accident, it would pay out three times your cover.
Another advantage of this policy is that you would only pay premiums up until the age of 90, but after this, the cover would continue even though you are no longer paying towards it.
The major reason people invest in over 50s insurance is to help loved ones cover any funeral costs when they pass away, if they haven’t already started saving towards it. The plan is also aimed at people whose medical issues might stop them from getting a normal whole of life policy.
If you are not yet 50, then you might want to consider whole of life as it may be more worthwhile for you.
It’s best to get advice on this from experienced life insurance professionals, so contact one of our advisors today for a free no obligation quotation
Term life insurance can be indexed alongside your debt repayments like a mortgage so that the assured sum matches your outstanding debt. Term life will only pay out in the event of your death if you pass way within the terms of the policy. If you outlive those terms then you will not receive a payout.
Whole of life insurance covers you for the whole of your life so you know your family will get a payout not matter what as there are no set terms.
This means that the life insurance company is guaranteed to pay out to your beneficiaries at some point so premiums are typically more expensive. However, if it isn't paying off debt that you are worried about and you want to leave money in trust or a lump sum to your family - the whole of life would better suit your needs. Speak to one of our advisors to be sure you are buying into an insurance product that gives you the cover that you want abd recieve a whole of life insurance quote.
At Quick Quote Life, we are sensitive to the fact that getting life insurance can be complex, particularly as there are many options available and various factors to bear in mind. Our experienced team of insurance advisors are available to answer any questions you might have about any policies. We can provide you with a whole of life insurance calculation at your request and are under no obligation to take it.
Not only do we endeavour to help find you the cheapest option, but most importantly, we can evaluate your situation and needs to identify the most suitable plan for you. It is also important to note that although a price might seem the cheapest, on providing medical disclosure, the price could increase. At Quick Quote Life we pride ourselves in locating the best cover following medical disclosures.
If you would like to find out more about whole life insurance or any of our other plans, give us a call for free today; if you wish, you can also receive a no-obligation quote from us.
*subject to you complying with all of the insurers terms and conditions.