Cover that lasts
your whole life.

What is whole of life insurance?

Whole of life insurance is a policy with no end date. Provided the premiums are paid, it pays a lump sum whenever you die, whether that is next year or in fifty years.

That single difference changes the economics completely. A term policy usually expires without paying anything, and its price reflects that. A whole of life policy will pay out eventually, so the insurer is pricing the timing of a certainty rather than the chance of an event. Expect it to cost several times what equivalent term cover would.

It is therefore rarely the right answer to “I have a mortgage and young children”. It is often the right answer to “there will be a bill when I die and I want the money there to pay it”.

Guaranteed vs reviewable premiums

This is the most consequential decision on a whole of life policy, and the one most often misunderstood.

Guaranteed premiums are fixed for life. What you agree at outset is what you pay at ninety. They cost more at the start and remove all future uncertainty.

Reviewable premiums start lower, then are reassessed at set intervals, often after ten years, then every five. At each review the premium can rise, sometimes steeply, because you are older and the payout is closer. Policyholders who cannot afford the increase in later life face a bleak choice: reduce the cover, or lapse the policy after decades of payments and receive nothing.

Where the policy exists to meet a liability that will definitely arise, most advisers favour guaranteed premiums, precisely because the plan has to still be standing at the moment it is needed.

Whole of life vs term insurance

Term insurance covers a defined period, twenty-five years to match a mortgage, or eighteen to see children into adulthood. It is cheap because most policies never pay out. It is the right product for a temporary need.

Whole of life covers a permanent need. Inheritance tax does not expire. Funeral costs do not expire. A financially dependent adult child does not stop being dependent on a set date.

If you are unsure which you need, the honest test is whether the need has an end date. If it does, term cover is almost always better value.

Using whole of life for inheritance tax

Inheritance tax is generally payable before probate is granted, which creates a real practical problem: the money is locked in the estate that cannot be released until the bill is paid. Families are sometimes forced to borrow, or to sell a property quickly and badly.

A whole of life policy written in trust sits outside your estate. It pays promptly to the trustees, who can settle the bill without waiting for probate. The sum assured is usually set against an estimate of the expected liability.

Our inheritance tax calculator gives an illustrative estimate of the potential bill. Tax treatment depends on your individual circumstances and may change in the future, and this is an area where proper advice matters; the policy must be written correctly to work at all.

What it costs and why

Premiums are driven by your age and health at outset, whether you smoke, the sum assured, and above all whether you chose guaranteed or reviewable premiums. Because cover lasts for life, starting earlier makes a substantial difference to the lifetime cost.

Some older whole of life policies have an investment element and a surrender value; most modern protection-focused policies do not, and cashing one in is not an exit strategy. Any figure quoted before an application is illustrative, not a quote.