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 2019 (99.99%) totaling £794 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 as 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 and your selfless investment will be wasted, meaning no pay out will be issued.

Features of whole of life insurance:

  • Guaranteed pay out - whole of life insurance guarantees your loved once 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 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 £25,000)
  • 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 £25,000, 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 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 for £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 ensure you’re getting the best deal when securing cover.

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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£121,687 is the estimated average outstanding mortgage per household in the UK.

Our property is generally the largest financial commitment any of us will make.

Your life insurance should cover this significant debt should you no longer be around.
£
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According to Money Advice Service, full-time childcare in the UK now costs £242 a week.

The loss of a parent could result in the need for additional childcare whilst the surviving parent increases their hours to account for lost income.

Your life insurance cover should factor in this additional required outgoing.
£
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The average level of debt (minus a mortgage) in the UK is £15,385.

Factoring in any outstanding debts in your name when arranging life insurance ensures this burden is not passed to loved ones.
£
?

You may wish to leave your loved ones an inheritance or lump sum gift upon your passing.

Factoring in the gift amount when arranging your cover will ensure the pay out amount will be sufficient to provide your loved ones with this selfless gesture.
£
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According to SunLife, the average cost of a UK funeral is now £4,417, whilst the total cost of dying is £9,493.

This is a 130% increase over the past 16 years and shows no signs of slowing down.

A significant cost which should be factored into the amount of life insurance you secure.
£
?

If you are one of the 65% of the UK who are lucky enough to have savings, this could be used as protection if you were to pass away.

Any pay outs from existing life insurance policies and investments can also be used as financial protection for your loved ones if you were no longer around.

Factor this into your required cover amount.
£ -

Your total cover estimate

£ 0

Let us find your best quotes.

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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 cover:

  • The cost of your funeral
  • An inheritance for loved ones
  • Contribute towards future family living costs
  • Pay 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 you’re loved ones receive a 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 for £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 be come 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, covering large expenses and covering funeral costs Ideal for covering 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 - £25,000)
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.

The average cost of a funeral has risen by 128% since 2004[1] and it shows no sign of slowing down, highlighting the need to address how your loved ones would cover this large financial expense.

Taking out a funeral plan allows you to lock in today’s price for a funeral and allows you to pay for it in advance in full or in affordable monthly instalments.

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 Plan can be paid for upfront in full or in monthly instalments
Pay out can cover full cost of your funeral Covers the cost of key funeral services
Won’t allow you to avoid rising funeral costs Allows you to lock’s in today’s price for services
Pay out can be used to cover other aspects of your life (such as an inheritance or future family living costs) Can only be used to cover your funeral
Cover from 27p-a-day through Reassured Prices from 63p-a-day* through Reassured


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.

Why not get in touch with our award-winning team to find your ideal solution? We can compare multiple life insurance policies and funeral plans to find you the best deal.

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 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 detaches your policy from your estate, allowing 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 40% inheritance tax for your loved ones - ensure your loved ones get the full 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 best available deal, it’s essential to compare quotes.

At Reassured we can carry out this process 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.

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Sources:

[1] SunLife (2021), Cost of Dying Report, sunlife.co.uk/costofdying2021

*63p per day pricing includes a £75 discount only available to Co-operative members and is based on a 50-year-old purchasing a Co-operative Simple Funeral Plan at £3,020 over the maximum term available of 25 years (total amount repayable £5,733.40) as of 1st March 2021

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