It's been said that "life is like a box of chocolates, you never know what you're gonna get".

Life is unpredictable with countless twists and turns, but the reality is - all life comes to an end at some point or another. But how can you protect your loved ones in case the worst should happen? That's where Whole Life Insurance can give you and your family peace of mind ahead of the future.

But what is whole life insurance and why do you need it? Let's take a look!

What is whole life insurance and how does it work?


Whole life insurance does exactly what it says on the tin - metaphorically speaking of course! A whole life insurance policy ensures you are covered for the whole of your life, from the moment you take out a policy.

Unfortunately, none of us has control over when we die and as much as we can dream, sadly, there is no fountain of youth around the corner.

With a whole of life policy, when you die, your policy pays out a lump sum amount to your loved ones, no matter when the time comes. Generally, these policies are more expensive compared to term life insurance as you are guaranteed a pay-out - so long as you keep paying your monthly premiums.

Whole life insurance is also known by some insurers as 'whole-of-life insurance' or 'life assurance'.

Types of whole life insurance

Whole life insurance comes in three main types of cover: 

  • Non-profit whole life cover is where the cost of your premiums and pay-out is fixed as in agreement with your insurance provider. This type of cover is also known as standard or balanced cover.
     

  • With-profits whole life cover works in which your policy is linked to an investment fund. Your insurer will invest the money you pay for your premiums in order to cover the cost of the eventual pay-out.

    The good thing is that if the investment does better than expected, bonuses can be added to the value of your policy. The downside is that if the investment underperforms, then the cost of premiums could be increased to cover the loss.
     

  • Unit-linked whole life cover is very similar to with-profits, except you get to choose how the investment fund is invested. Like with profits, the success or failure of the investment can impact the value of your policy and the cost of premiums.

Why do I need whole life insurance?


There are a number of reasons why you should consider taking out a whole of life insurance policy. For starters, whole life insurance provides you and your loved ones with peace of mind, ensuring a lump sum pay-out. Although it is more costly than term life insurance, the term length lasts right up to your death.

The pay-out from a whole life insurance policy can be used to help:

  • Your family: The policy pay-out can be used to help your family, providing them financial support when you are no longer around.
     

  • Financial support: Paying off outstanding payments such as loans and debts.
     

  • Your family's home: The pay-out can be used to cover your family's housing costs such as mortgage or rent that your family may struggle to pay alone.
     

  • As a legacy: Whole life insurance can help ensure that your loved ones are left with an inheritance to use towards a family of their own.
     

  • Funeral costs: Funeral costs don't come cheap. Whole life insurance can ease the financial burden on your family, allowing them to give you the send-off you deserve!

Whole life insurance vs term life insurance


Whole life insurance and Term life insurance are the two main types of life insurance cover. Though they work similarly there are a few things that set them apart from each other.

  • Cost: Generally speaking, term life insurance is usually cheaper than whole life insurance. This is because term life insurance provides coverage for a set period of time (I.e 20 years) as opposed to the rest of your life.
     

  • Policy length: As mentioned above, term life insurance lasts for a set period. The main downside to this is that should you outlive the policy term, you will no longer receive a payout upon your death. That means you will need to take out another life insurance policy if you want further coverage. Whole life insurance provides a guaranteed lump sum pay-out as long as you maintain your premium payments, no matter when you die.

How much does whole life insurance cost?


There are several factors that are used to determine the cost of a whole life insurance policy. Your policy is calculated depending on:

  • Your age
     

  • If you have any pre-existing medical conditions
     

  • If you smoke
     

  • The amount of cover you want
     

  • The type of cover you want

With most types of life insurance, the older you are, the more you can expect to pay for a policy. This is simply because as you get older, the greater the risk of death and so your insurance provider is taking a bigger risk in insuring you. If you are 50 and over, it may be better to look at an Over 50's life insurance policy

Most insurers will ask about your health and whether you have any pre-existing conditions. In some cases, they may also ask about your family's medical history. Typically, if you are a smoker you will pay more for life insurance as it's well known that smoking causes damage to your health.

Where can I buy whole life insurance?


To get a quote for Whole of Life insurance speak to an adviser

Speak to the experts...

Give our advisers a call today.

Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.

The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way. 


01392 43 61 93(Monday to Friday, 9am - 5.30pm)

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At Cavendish Online, We are committed to helping our customers find the best and cheapest life insurance policies to suit their needs. We offer several options to help you find the right policy for you and your loved ones, as easy as possible.

Getting a life insurance quote has never been as simple! You can get a quote yourself in minutes by filling out our easy-to-use online form. Or if you fancy a personal touch, speak with one of our friendly specialists, who are just a phone call away from helping you find the best policy.

Call us on 01392 241 850 to reach one of our helpful consultants and get yourself covered!

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