Whole of Life Insurance cover will pay out a lump sum whenever you pass away, as long as your premiums are paid up to date.

Reasons why people arrange Whole of Life policies:

  • To cover their funeral costs or to leave a lump sum for their nearest and dearest
  • Upon death, Inheritance Tax Liability (IHT) is paid on any part of your estate that exceeds the ‘nil-rate band’, a threshold that currently stands at £325,000 (ie £650,000 for couples). The current rate of IHT is 40%. A Whole of Life policy could be used to help cover a potential IHT Liability*

Depending on the insurer, premiums are either paid throughout your life or until a prearranged age (when premiums stop but cover continues).

The premiums for Whole of Life Insurance policies tend to be more expensive than those of Term policies, as they are guaranteed to pay out. With a Term policy the benefit will only be payable if you pass away before the cover’s end date.

It is wise to consider index-linking your policy, which will help protect the benefit from the effects of inflation.

A ‘medically underwritten’ Whole of Life Insurance policy should not be confused with a ‘Guaranteed Acceptance’ Over 50’s plan (more information below).

If you cancel or stop paying your premiums, you won’t get any money back. There is no investment value in the Whole of Life Insurance policies which we arrange.

To speak with one of our advisers, who will be happy to discuss your options and provide you with a quote (which will always be confirmed in writing) from one of the UK’s leading Life Insurers, please call us on 0800 644 4468, or choose a call back and we will contact you at a convenient time. Call me back

*The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

The benefits of index-linking your policy

Arranging cover with an index-linked option means the policy increases on an annual basis to offset the effects of inflation. This is important because as time goes by, the real value of the pay-out will decrease. It is safe to say that £100,000 today will not be worth the same in 20 years. In 1982 the average price of a litre of petrol was 35p, by October 2019 it was £1.28. Index-linking your Life Assurance policy will allow it to maintain its value.

Most providers allow you to opt-out of indexation. This means you can freeze your premiums and benefits at any point.

If the main purpose of arranging cover is to leave a lump sum for your nearest and dearest, it may well be a good idea to arrange your cover with an indexation option.

Guaranteed acceptance over 50’s plans

An Over 50’s plan with no medical underwriting

A guaranteed over 50’s plan is a Whole of Life Insurance plan that pays out a cash sum when you die.

Acceptance is guaranteed, with no medicals or health questionnaires to complete; quite simply you will be covered regardless of any health issues you may have, as long as you are between the ages of 50 and 85*.

The over 50’s guaranteed life insurance plan is an affordable way to leave money to those you care about, giving them the flexibility to use it in a way that suits them:

  • Help with funeral costs
  • Pay off outstanding debts or bills
  • Leave as a gift for grandchildren

What are the benefits?

  • Guaranteed acceptance – you will be covered regardless of any health issues
  • No medical or health questions to answer – just a straightforward simple application
  • Affordable monthly payments – starting from £10
  • Guaranteed cash sum when you die – that can be used to help your family financially
  • Fixed monthly payments – can help with budgeting
  • Full life cover after an initial period of 2 years* – if you die within this period the money paid in will be refunded
  • Available to anyone in the UK between the ages of 50 – 80*
  • You choose how much you want to pay on a monthly basis or how much cover you need

Things to consider:

  • These type of plans are normally more expensive than a medically underwritten Whole of Life plan
  • If you were to die during the initial 2 year period*, you would not be covered for the full cash sum however, one and half times your paid monthly premiums would be refunded.
  • Premiums are payable until you pass away or until your 90th birthday* whichever is sooner
  • Depending on how long you live, there is a chance you could pay in more than the plan pays out
  • The amount of money paid out when you die is fixed so inflation will reduce its value over time
  • If you cancel or stop paying your premiums, you won’t get any money back
  • The money usually gets paid to your estate so may be subject to inheritance tax, unless you place your policy in a Trust

* Plans vary depending on the life insurance provider

If you would like some friendly and expert advice, call Freephone 0800 644 4468 – Monday to Thursday from 09.00 to 19.00 and on Friday between 09.00 and 17.00.

Please feel free to read our Independent client reviews, or read about the team at Future Proof.


Whole of Life
Aimee Scott

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