What is a Whole of Life insurance plan?

Whole of life insurance plans guarantee to pay out when you die, whatever the age. How do they work?

Robert Drury


What is a Whole of Life insurance plan?

Whole of life insurance plans guarantee to pay out when you die, whatever the age. How do they work?

What is a Whole of Life insurance plan? These types of life insurance policies will always pay out whenever the insured person dies. The plans differ from most other forms of life insurance as the cover does not end at a given date. Therefore, the plan guarantees to pay a pre-determined benefit at some at some point in the future. This explains the name relating to the provision of cover for the whole of the policyholder’s life.

Assuming all premiums have been paid and the plan is still in force, it guarantees to pay out the specified benefit regardless of when the insured person dies.

How are premiums calculated?

The insurance company will calculate monthly premiums based on these factors:

  • How much cover is needed
  • The age of the applicant at outset
  • Medical history will be considered
  • Occupation, hobbies and pastimes can affect the cost if they create a greater risk of dying
  • Whether the applicant is a smoker

Since December 2012, insurers have not been able to differentiate on cost between men and women for life cover. As a result, ‘normal’ premiums for men and women will be the same for men and women of the same age. Increases to the normal premiums will reflect any health or lifestyle issues.

The premiums for the plan are usually fixed for a certain period, typically 10 years . Thereafter, frequent reviews of the level of cover and cost will take place. The insurer may revise the premiums according to the revised age of the policyholder, their own claims experiences, and the running costs of the plans. However, changes in health are not considered. If a rise in premiums at a review is requested, an alternative to paying more might be to reduce the level of cover.

Where is such a plan used?

Because there is a guaranteed payout these plans are useful where there is a need to have a definite benefit paid to someone upon death, whenever this should occur. This may be to leave money to family, other beneficiaries or to cover funeral costs.

In some cases it can be used to provide for the payment of inheritance taxes upon death. This leaves more of the estate for beneficiaries. It is common to see plans put into a Trust arrangement (a legal procedure to transfer the ownership of benefits away from the policyholder and their estate) to ensure the benefits in payment are not themselves subject to inheritance tax.

A version of a whole of life plan is marketed as a ‘no medical life insurance‘ for the over 50’s.

THE PLAN MAY HAVE NO CASH IN VALUE AT ANY TIME. IF PREMIUMS ARE NOT MAINTAINED THEN COVER MAY LAPSE

Contact Us

Contact Andy Wilson Financial Services directly or fill out your details and we will contact you as soon as we're available.

I provide my consent for Andy Wilson Financial Services to contact me regarding my enquiry. We will use your name, email address and contact number (‘personal information’) to contact you about the services you have requested or respond to an enquiry you have submitted, which will require us to share your personal information with our advisers and supervisors. For further information on how your information is used, including disclosure to third parties, how we maintain security of your information and your rights in relation to the information we hold about you, please see our Privacy Policy.

Email communications are not secure and for this reason Andy Wilson Financial Services cannot guarantee the security of the email, its contents or that it remains virus free once sent.

Andy Wilson Financial Services Ltd is an appointed representative of TenetLime limited, which is authorised and regulated by the Financial Conduct Authority. TenetLime limited is entered on the Financial Services Register (www.fca.org.uk/register) under reference 311266.

Andy Wilson Financial Services Ltd is Registered in England and Wales under reference no: 07547809. Registered Office: Landmark House, 1 Riseholme Road, Lincoln, LN1 3SN.

The information contained in this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.

Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

You can adjust all of your cookie settings by navigating the tabs on the right hand side.

Functional Cookies

Several cookies are required for the site to function (such as this acceptance form). These enhance the experience of using the site by remembering certain actions and allowing core functionality.

Marketing Cookies

This website uses third party marketing cookies to collect anonymous information about your browsing habits.

Analytical Cookies

This website uses third party tracking cookies such as Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Keeping this cookie enabled helps us to improve our website.

Privacy Policy

Please find the Privacy Policy for Andy Wilson Financial Services to understand our views and practices regarding Your Data and how we will treat it.

Privacy Overview
Functional Cookies
Marketing Cookies
Analytical Cookies
Privacy Policy

Request a call back

Fill out the form below and we will ring you as soon we can.

I provide my consent for Andy Wilson Financial Services to contact me regarding my enquiry. We will use your name, email address and contact number (‘personal information’) to contact you about the services you have requested or respond to an enquiry you have submitted, which will require us to share your personal information with our advisers and supervisors. For further information on how your information is used, including disclosure to third parties, how we maintain security of your information and your rights in relation to the information we hold about you, please see our Privacy Policy.

X