Whole of Life Insurance provides you with a level of cover for the length of your life. With this type of insurance it is guaranteed that the policy will pay out upon your death. Whole of life policies are in the main used as a way of providing adequate security for your family or other dependents and can also be suitable for Inheritance Tax Planning.
In most cases your policy will have a review date which will compare the value of the policy you have with the value of benefits it is to provide. It is important to note that at this point you could be asked to increase the amount of the premiums that you pay.
You may be asked to continue paying your premiums until you die or until you reach a certain age. If the latter is the case then your cover will continue until you die. There are a number of different providers of whole life insurance so it’s always best to look for one that has the kind of investment options you are looking for in a life insurance provider.
Advantages
- You are guaranteed a pay out from your policy which is different than most life insurance policies on the market.
- Another advantage of a whole life insurance policy is that it provides you with the option to combine it with term insurance.
Disadvantages
- Whole of life insurance is often more costly than other forms of life insurance that are available so not everyone will necessarily be able to afford this option.
- It also means you are typically locked into a longer policy than one where you can pick your length such as Term Life Insurance.
