Whole of Life

Whole of life policies are designed to provide life assurance for the whole of an individual’s life, rather than a specified term. They contain a savings element, the idea of which is to build up a fund in the early years which will subsidise the life assurance cost in later years. A fixed death benefit is paid to the beneficiary; this is either the sum assured or the value of the investment pot, which ever is the greater.

Premiums are usually fixed for the first 10 years, and each 5 years thereafter. From here the policy is reviewed and the premiums or the sum assured may need to be adjusted depending on investment returns. Management fees also take a portion of the premiums.

Whole of life policies can be useful for some people to provide for Inheritance Tax liability.

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