Guide to Life Insurance

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Whole Life Insurance

Whole of life policies see premiums being paid which provide for a lump sum to be paid at any time death occurs to the assured life. Depending on the policy, an investment element is sometimes incorporated along with the permanent life cover.

The type of cover determines the amount of the lump sum.

Type of Whole of Life Policy	What does that mean?	Comments
Non-profit	Your premiums pay towards the sum assured which remains the same throughout the policy.	Unfortunately this does not take into account inflation.
With-profits	Premiums will go towards both the insurance cover and an investment. The sum assured increases with a bonus which is paid yearly and a final bonus at the end of the policy.	The bonus is not guaranteed.
Unit Linked	Throughout the life of the policy, you are provided with a choice of the level of death cover. Once you have made this choice, your premium buys units in a fund, which you can select at the offer price. These units are then cancelled in order to buy death cover. Periodically, a premium review will be undertaken in order to enable the death cover to continue at the same level by keeping a sufficient reserve.	The unitised whole of life policy provides the greater of the value of the with profits units or the death benefit.

The type of policy you choose will determine
the amount of the lump sum paid on your death.

In summary, a non-profit policy sees the sum assured staying the same. A with-profits policy sees the sum assured increasing by a bonus being paid at the end of each year and a final bonus at the end – although none of these are guaranteed.

A unit-linked policy sees the sum assured being linked to the investment’s valued.

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Guide Contents

What is life insurance?
The different types of life insurance cover
Term insurance
Whole life insurance
Shopping around for life insurance UK
Apply for life insurance
Make a claim
Life insurance FAQ
Where to get more life insurance help

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