What is whole of life insurance?

  • Loved ones are guaranteed a pay out
  • Provides cover for the rest of your life
  • Offers a greater sum assured than an over 50s plan
  • Medical information is required during application
  • Affordable cover from 27p-a-day ±
Whole of life insurance policy summary

A whole of life insurance policy guarantees to pay out a cash lump sum to your loved ones upon your passing.

Once in place, cover will last for as long as you live, hence the policy name whole of life.

Whole of life insurance is actually a form of life assurance as your policy is assured to pay out at some point, provided that you continue to pay your premiums.

Almost all whole of life insurance claims were paid out in 2021 (99.99%) totalling £947 million - (source: www.abi.org.uk)

Continue reading to learn more about whole of life insurance, how much it costs and how you can secure this policy type….

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How does whole of life insurance work?

Whole of life insurance works as simply as:

  • Apply - specify your cover amount and your premium will be calculated using your level of cover and personal circumstances
  • Pay premiums - you’ll need to continue to pay your monthly premiums to keep your cover valid
  • Make claim - when you pass away your loved ones will need to contact your provider to make a claim on your policy
  • Receive pay out - once your claim has been assessed, a lump sum pay out will be made to your beneficiaries

Upon application, your cover amount is specified and your monthly life insurance premiums are calculated accordingly.

Monthly premiums will then continue for the remainder of your life.

After you’ve passed away your loved ones can claim on your policy and receive a lump sum pay out.

If you stop paying your premiums your cover will cease meaning no pay out will be issued.

Features of whole of life insurance:

  • Guaranteed pay out - whole of life insurance guarantees your loved ones a pay out when you pass away, not if
  • Fixed sum assured - the amount paid out to your loved ones won’t change throughout the lifetime of the policy
  • Fixed premiums - the amount you pay for your premium won’t change throughout the lifetime of your policy
  • Waiver of premiums - some policies will allow you to keep your policy in place if you’re unable to pay your premiums for a period of time (for example, if you become ill and cannot work)
  • Joint life insurance - whole of life insurance can be taken out on a joint basis, allowing you to save money on your policy by covering two lives simultaneously

Is whole of life insurance right for you?

Whether whole of life insurance is right for you will depend on what you want to cover and your available budget.

Whole of life insurance is often well suited to those:

  • Looking to secure a guaranteed pay out
  • Requiring a larger sum assured (up to £1,000,000) than an over 50s plan (up to £20,000)
  • In the later stages of life
  • In good overall health and wellbeing

Whole of life insurance is an ideal option for those who want to guarantee their loved ones an inheritance.

Particularly for those later on in life, taking out a whole of life insurance policy allows you to provide a greater sum than with an over 50s plan.

Over 50s plans tend to have a sum assured capped between £10,000 and £20,000, whereas whole of life insurance offers the potential to secure up to £1,000,000 of cover.

This allows you to provide a greater inheritance and ensure multiple financial commitments are protected for your loved ones.

Those who’re in good health can benefit from more favourable premiums, as you’ll need to provide medical information at the point of application to help insurers calculate your monthly premium.

Speak to a friendly member of our team to find out if whole of life insurance is the right option for you. Simply get in touch.

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What is the cost of whole of life insurance?

As with standard life insurance, whole of life insurance premiums are calculated using a number of key factors:

Due to a pay out being guaranteed, premiums for whole of life insurance tend to be higher than term-based cover.

Occasionally, whole of life insurance policies offer an upper age limit, at which point premium payments will cease but your cover will remain in place (this is often around 85 - 90 but this can vary between providers).

All policies provided though Reassured come with fixed monthly premiums, meaning the amount you pay each month will never increase.

Cost of whole of life insurance by age

The table below shows the price of whole of life insurance by age. Quotes are based on a non-smoker in good health, taking out £100,000 of cover:

Age Price per month
25 £65.43
30 £72.10
35 £84.56
40 £103.03
45 £126.75
50 £150.17
55 £179.64
60 £210.54
65 £266.15
70 £349.96


While premiums can be lower at a younger age, paying this amount throughout your lifetime could lead to you paying more into the policy than it will pay out.

Taking out cover at an older age, while still in good health, will allow you to benefit from a guaranteed pay out with a higher sum assured than with an over 50s plan.

Comparing quotes is always the best way to help you find the right cover at the right price.

Whole of life insurance calculator

Life insurance calculators can be beneficial in helping you to work out the level of cover you require.

Working out a large sum of money can seem like a daunting task, but it doesn’t have to be.

Simply add together the sum of your financial commitments and you’ll have a rough idea of the level of cover you’ll need.

Alternatively, you can input your financial commitments into the calculator below to quickly and easily estimate the sum assured you may need.

How much whole of life insurance do you need?

Enter your financial commitments below to understand the level of whole of life cover you require.

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£137,934 is the estimated mortgage debt per household in the UK.

The purchase of a home is likely to be the largest financial commitment any of us will make in our lifetime. Your life insurance should cover your remaining mortgage balance to allow your loved ones to stay in the family home should anything happen to you.

Source: Moneynerd.co.uk
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The average monthly household budget in the UK is £2,548 (that’s £30,576 per year), which is spent on transport, food & drink, utilities (gas, electricity, water etc), clothing, council tax and leisure activities.

With energy prices hitting a record high and the cost of living rising sharply in the UK, you may wish to factor in utility bills and family living expenses into your cover.

Source: Nimblefins.co.uk
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The average personal debt of UK adults has risen to £34,566 (not including mortgage debt), with credit cards, personal loans and overdrafts being the most common forms of debt.

Factoring in any debts into your life insurance cover means that, if they need to be paid back from your estate after your passing, your loved ones won’t miss out financially.

Source: Money.co.uk
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According to SunLife, the average cost of a funeral in the UK is £3,953 (with the overall cost of dying at £9,200).

Funeral costs have increased by 116% since 2004 and are a significant cost which should be factored into the amount of life insurance you secure.

Source: SunLife.co.uk
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When factoring in cover for your children, you may wish to calculate the amount based on how long it is until they reach financial independence.

This could include childcare (£7,000 per year for part-time care), school expenses (£1,519 per school year for uniforms, lunches, stationary etc), as well as an additional sum for further education (this could be a contribution of up to £5,000 per year).

Sources: Daynurseries.co.uk, Primarytimes.co.uk & Savethestudent.org
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2 in 5 adults say they are relying on an inheritance to fund their retirement.

Factoring in an inheritance to your sum assured could allow loved ones to live a more financially comfortable life. Alternatively, you could leave a cash gift to a charity of your choosing.

Source: Moneyage.co.uk
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If you’re lucky enough to have your own savings or are part of the 30% of UK residents who already have a life insurance policy in place, this can provide financial protection for loved ones.

By entering your current cover, savings or death in service amount you can reduce the sum assured you require.

Source: Scottishbusinessnews.net
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Uses for whole of life insurance

The main purpose of whole of life insurance is to guarantee your beneficiaries a pay out after your passing.

Typically taken out by those later in life, whole of life insurance policies tend to be used to help cover:

  • The cost of your funeral
  • An inheritance for loved ones
  • Future family living costs
  • Inheritance tax if your estate is large

Often, later in life, your mortgage and other debts have been paid off. However, a whole of life pay out can ultimately be used for anything your beneficiaries deem fit.

Why not talk to our award-winning team about your unique reasons for needing life insurance to help establish the right type of cover for you?

Types of whole of life insurance

There are typically two different types of whole of life insurance:

  1. Investment
  2. Non-investment

These are sometimes known as with-profit and non-profit whole of life policies.

A non-investment whole of life policy (the most common type) requires you to pay fixed premiums and after you pass away, your beneficiaries receive a fixed pay out.

This allows you to have the security of knowing exactly how much your loved ones will receive.

An investment whole of life policy invests a proportion of your monthly premiums.

As a result, the amount your beneficiaries receive may be significantly higher or lower dependant on the performance of the invested proportion.

Due to the level of risk associated with investment policies, at Reassured we only offer non-investment policies so you can ensure your loved ones receive a fixed pay out.

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Can I take out joint whole of life insurance?

Yes, whole of life insurance can be taken out on a joint basis.

A joint life insurance policy allows you to save money by covering two lives simultaneously under one policy.

There’s only one application form and only one premium to pay.

However, this means there’s only one pay out which will typically occur after the first death.

This can leave the surviving partner needing to secure new cover at a much older age, which could lead to inflated premiums.

The table below shows a price comparison between a joint whole of life policy vs two single whole of life policies. Quotes are based on non-smokers in good health taking out £100,000 of cover:

Age Joint whole of life insurance Two single whole of life policies
25 £75.56 £130.86
30 £84.30 £150.20
35 £96.40 £169.12
40 £118.78 £206.06
45 £148.06 £253.50
50 £183.02 £300.34


In regards to whole of life insurance, the saving achieved with a joint policy can be a significant amount.

Although, in contrast, with two separate policies you’ll be more comprehensively covered.

If joint whole of life insurance seems more suited to your budget, simply get in touch and we can conduct a full single vs joint life insurance comparison.

Can I add critical illness to a whole of life insurance policy?

No, unfortunately, critical illness cover can’t be added to a whole of life insurance policy for combined cover.

However, it’s possible to secure a standalone critical illness cover policy in order for you to benefit from this cover.

This would mean paying two separate premiums, which could make this a costly option.

Critical illness cover provides an additional layer of protection which will pay out to you in the event you’re diagnosed with a serious illness (that’s listed within your policy).

The funds can then be used to help fund medical treatment, replace lost income or pay for carers.

Reassured can’t currently offer standalone critical illness cover. However, if you’re interested in this form of cover, we can secure you a term life insurance policy with added critical illness cover.

Whole of life insurance vs term-based life insurance

Unlike traditional term-based life insurance which lasts for a set period of time, whole of life insurance provides cover for the rest of your life.

Other than the length of cover, term-based life insurance and whole of life insurance are very similar.

Both policies allow a high sum assured (up to £1,000,000) and both require you to provide medical information in order for insurers to determine the level of risk you pose.

However, because the pay out is inevitable, the cost for whole of life insurance is usually significantly higher.

Whole of life insurance Term life insurance
Provides lifetime cover Provides cover for a specified period of time
Pay out is guaranteed Pay out will only occur if you pass away during the term
You’ll need to pay monthly premiums to keep your cover valid You’ll need to pay monthly premiums to keep your cover valid
Can become a costly option if taking out cover at a young age The most affordable form of cover
Well suited to those later on in life looking to provide an inheritance for their loved ones Well suited to those who’re young with families and mortgages to protect

Want to know more about how these two policies compare? Read our complete term life insurance vs whole of life insurance guide »

Whole of life insurance vs over 50s plan

Both whole of life insurance and an over 50s plan are types of life assurance, as your loved ones are guaranteed a pay out when you pass away.

They both cover you for the rest of your life, provided you continue to pay your monthly premiums.

The main difference between the two is that whole of life insurance requires you to provide medical information at the point of application.

With an over 50s plan, you’re guaranteed acceptance (if you’re a UK resident aged 50 - 85) with no medical information required.

Although some providers may take into account your smoking status.

Whole of life insurance Over 50s plan
Rest of life cover Rest of life cover
Ideal for providing an inheritance, helping to cover large expenses and funeral costs Ideal for helping to cover funeral costs
Larger sum assured potential (up to £1,000,000) Sum assured is capped at a lesser sum (this is often between £10,000 - £20,000)
Acceptance is subject to individual assessment Guarantees acceptance (ages 50-85)
Requires you to provide medical information during the application Doesn’t require any medical information
You’ll need to pay premiums for the rest of your life You’ll need to pay premiums for the rest of your life
Some providers offer an upper age limit where premiums cease but cover remains in place Some providers offer an upper age limit where premiums cease but cover remains in place
Cover from 27p-a-day through Reassured Cover from 20p-a-day through Reassured+


Ultimately, which option will be best for you will depend on your personal circumstances.

For example, those that fit into the age bracket that have less than favourable health may opt for an over 50s plan as you’ll be guaranteed acceptance.

Whereas those who’re in still in relatively good health may choose whole of life insurance to provide a greater pay out amount.

Speaking to a life insurance expert, such as Reassured, can help you to determine the best form of cover to meet your needs, simply get in touch and let us compare multiple policies.

Whole of life insurance vs funeral plans

Generally speaking, both whole of life insurance and funeral plans are both taken out later in life.

Whilst the pay out from whole of life insurance can be used to cover funeral expenses, it can also be used by your loved ones to for whatever they want.

In contrast, a funeral plan can only be used to pay for your funeral. (Please note, Reassured are unable to sell funeral plans. If you are looking for a funeral plan we suggest you check the FCA register to find a regulated provider).

The average cost of a funeral has risen by 116% since 2004[1] highlighting the need to address how your loved ones would cover this large financial expense.

Taking out a funeral plan allows you to cover your key funeral costs and ensures that your funeral services are planned ahead of time.

Whole of life insurance Funeral plan
Provides a cash lump sum pay out to your loved ones after your passing Allows you to plan and pay for your funeral in advance
Paid for by monthly premium payments Paid for in monthly installments or upfront
Pay out could help to cover funeral costs Covers the cost of key funeral services
Pay out can be used in other ways, such as to help cover family living expenses or to provide an inheritance Can only be used to cover your funeral costs
Cover from 27p-a-day through Reassured Reassured do not sell funeral plans


It’s not necessarily the case of one or the other. If your budget allows, it’s completely possible to secure a whole of life insurance policy and a funeral plan simultaneously.

A whole of life insurance policy to provide an inheritance for your loved ones to spend how they wish.

A funeral plan to ensure your funeral is paid for and planned in advance to alleviate your loved ones of this financial and emotional burden.

Reassured can compare multiple life insurance policies to find you a great deal. Unfortunately, Reassured cannot compare funeral plans for you.

Not sure how life insurance and funeral plans differ and which is best suited to your needs? Read our in-depth article on life insurance vs funeral plans.

What are the pros and cons of whole of life insurance?

While whole of life insurance has the main benefit of providing a guaranteed pay out, there are some drawbacks to this form of cover.

Particularly if you’re taking out cover at a young age as you could pay more into the policy than it will pay out.

Pros Cons
Large sum assured potential (up to £1,000,000) If taking out cover at a young age, you could pay more into the policy than it will pay out
Covered for the rest of your life (as long as you continue to pay premiums) You’ll need to pay premiums for the rest of your life to keep cover valid
Loved ones are guaranteed a pay out when you pass away Medical information is required which can make this an unaffordable option for those with poor health
Pay out can be used to help cover large expenses or can be left as an inheritance for your loved ones to enjoy Critical illness cover can’t be added to a whole of life policy for combined cover
Cover only comes to an end if you pass away, cancel your policy or stop paying premiums  


To find out if whole of life insurance is the right option for you, why not speak to a friendly member of our team?

Tax advantages of whole of life insurance

Often people take out whole of life insurance with the intention of protecting their family from an inheritance tax (IHT) bill they’ll be required to pay.

Inheritance tax is currently charged at 40% on anything over the £325,000 threshold. This includes any property, savings, possessions and any life insurance proceeds.

Therefore, for those with a large estate, the inheritance tax bill alone could be very significant.

In this instance, a whole of life insurance policy could be written in trust. This is a process that can detach your policy from your estate, which would allow the proceeds to help cover the bill when the time comes.

Writing your whole of life insurance policy in trust:

  • Have more control over how your policy is distributed - the trustee will distribute your pay out as per your wishes
  • Avoid probate for your loved ones - leading to a faster pay out
  • Avoid/minimise 40% inheritance tax for your loved ones - ensure your loved ones get a larger amount

When you write your life insurance in trust you sign the rights of the policy over to someone you trust after you’ve passed away (a trustee).

The trustee will then be responsible for distributing your pay out as per your wishes.

At Reassured we offer a FREE trust writing service on most of our policies to help you have the confidence that your policy is exactly as you wish.

Do I get money back if I cancel my whole of life insurance?

Typically, you won’t receive any money back if you cancel your whole of life policy.

As your cover lasts for life, you’ll need to pay your premiums for the rest of your life in order for your cover to be valid.

Therefore, if you stop paying or terminate your policy, any premiums will be lost.

Most importantly, your loved ones won’t receive a pay out upon your passing which could leave them financially vulnerable.

However, with some investment policies you’ll be able to cancel your policy and pay a ‘surrender value’ which will allow you to receive some funds back from the policy.

Investment policies aren’t something we offer at Reassured.

Is whole of life insurance worth it?

Whether whole of life insurance is worth it or not will ultimately depend on your personal circumstances and type of cover you require.

As discussed, whole of life insurance tends to be most appropriate for those later in life but in good health.

This allows you to benefit from lower premiums whilst reducing the likelihood of living long enough to pay more into the policy than the overall sum assured.

Why not contact Reassured who can provide you with all the information you need to make a fully informed decision about whether whole of life insurance is right for you.

Whole of life insurance quotes

The cost and cover of whole of life insurance can vary significantly between insurers.

As a result, to secure yourself the right cover at the right price, it’s essential to compare quotes.

At Reassured we can provide these quotes for you, saving time and money.

Our quote service is completely free for you to use and we’re FCA-regulated.

Obtain your whole of life insurance quotes today and protect the financial future of your loved ones by guaranteeing them a pay out.

Simply get in touch.

Compare Whole of Life Insurance Quotes »

Sources:

[1] https://www.sunlife.co.uk/funeral-costs/

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