Frequently Asked Questions
When you take out a whole of life policy, you usually pay a premium on a monthly or annual basis. An insurance provider takes some of your payment to pay for the policy and invests the rest. You’ll remain covered whilst you are paying the premium.
The two main types of whole of life cover are:
- Balanced cover – This is sometimes called standard cover and it’s when your premium is set by a provider at a sum that’s high enough to remain the same level for the whole length of a policy. The pay-out will also be fixed and it will have been agreed when you sign up for the policy.
- Maximum cover – This cover is often cheaper at first, because much of your payment goes on your policy instead of being invested on your behalf. However, a provider will review your policy (after a pre-agreed timeframe) and can increase your premium if you are considered to be more of a risk.
It’s worth noting that there are also whole of life plans that charge a fixed premium for a set amount of cover. You’ll know up front how much a policy costs, how long it will run for, as well as the sum you’ll get as a pay-out.
The lump sum payment, which is tax-free, will depend on the specific details of the policy. Each policy is different and so will be the size of the pay-out. Sometimes, you can choose to stop paying once you’ve reached a certain age. In other cases, you’ll keep making monthly or yearly payments until you pass away. This really depends on the policy and the provider. Whole of life cover can also be set up in a trust – in this instance a pay-out would be made to the trustees, who’ll be in charge of distributing a sum to any beneficiaries.
Once you’ve thought about a plan, it’s time to decide if a whole of life insurance policy is for you. Whichever policy you go for it’s crucial that you’re aware of any exclusions and limitations, so that you fully understand what you’re signing up for and your loved ones won’t be left with less than you expect.
There are hundreds of providers, products and policies, which can be quite difficult to navigate. This is the reason we provide access to a team of experts, who research the whole of the market, help you reflect upon what is important to you. Through this bespoke process, we will look at health, lifestyle, affordability, employment and family. Collectively, we will pinpoint the best product, provider and policy with the best value and benefits for you and your family.