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Whole of life insurance

What is whole of life insurance?

Whole of life insurance, or whole of life assurance is a type of life insurance that pays out a lump sum to your loved ones when you die. There’s no fixed time frame for this policy to be paid out. A lump sum is guaranteed as long as your policy is in place in the event of your death. Whole of life insurance is typically more expensive than other life insurance policies because the policy lasts for your entire life.

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How does whole of life insurance work?

Whole of life insurance works differently to other life insurance policies. You pay a premium on a monthly or annual basis. Your insurance provider then takes part of the payment to pay for the policy and invests the rest. When you die, your insurance provider will pay out a lump sum to your loved ones but the amount will vary depending on the specific details of your policy.

It’s also possible to set a whole life policy up in a trust. In which case, a payout will be made to the trustees and they’ll be in charge of distributing a sum of the payout to your beneficiaries. A whole life insurance policy is guaranteed to pay out, unless the cause of death isn’t covered by your policy or you missed a monthly payment.

 
 

What types of whole of life insurance can I get?

There is three main whole of life insurance policies available:
 
  • Non-profit whole of life insurance – you pay a fixed premium throughout your life. In the event of your death, your insurance provider pays out a set cash sum.
  • With-profit whole of life insurance – you pay a fixed monthly premium and your insurer invests the money on your behalf. When you die, the payout is based on how the investments perform, so your family could get a big or small payout.
  • Unit-linked whole of life insurance – your monthly premiums are based on the size of the payout you want. Your premiums are invested into the stock market by your insurer. So if the investments underperform, you’ll need to pay more in.
 
 
 

How much does whole of life insurance cost?

The cost of whole of life cover depends on your age, medical history and the level of cover you take out. Your premiums might be cheaper if you take out a joint life insurance policy with a partner; they’re typically cheaper than having two individual policies.

If you have a poor medical history, you might find that your premiums are more expensive or you might find it difficult to get accepted for full life insurance altogether.

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

 

Pros

  • Your loved ones are guaranteed a payout provided you keep up to date with your monthly payments
  • It builds cash value over time as you pay your premiums
  • Your premiums are fixed

Cons

  • The premiums are typically more expensive than term policies with a comparable death benefit
  • Some of your premium is invested so it’s much more complex than other life insurance policies
 
 

Compare whole of life insurance providers

Compare life insurance providers on Compare by Review today. We’re the first and only comparison site that ranks life insurance providers exclusively on customer experience and product quality rather than price. We don’t think that cheap whole of life insurance is necessarily the best whole of life insurance policy for you. Our full table of providers will give you an impartial and unbiased overview so you can purchase life insurance from a high-quality provider that you can rely on when you need them most.

1st

Review Score

9.7

based on 4334 reviews

Life insurance quote

£7.96

per month

With critical illness cover

£26.06

per month

Minimum cover limit

£40k

Maximum cover limit

£750k

Beagle Street offers an early payout for terminal illness and all premiums are fixed and will not change.

2nd

Review Score

9.4

based on 37108 reviews

Life insurance quote

£8.61

per month

With critical illness cover

£25.73

per month

Minimum cover limit

N/A

Maximum cover limit

£1.5m

All policyholders get free access to LV= Doctor Services and terminal illness cover is included at no extra cost.

3rd

Review Score

9.2

based on 1654 reviews

Life insurance quote

£8.44

per month

With critical illness cover

£21.02

per month

Minimum cover limit

N/A

Maximum cover limit

£500k

All Royal London life insurance policies include terminal illness cover at no additional cost.