Whole of Life

What is it?

Whole of Life Policies are designed to provide cover throughout your life.  They can pay out a lump sum upon premature death or diagnosis of a defined list of serious health conditions such as heart attack, stroke or cancer depending which type of cover is selected.  For each type of policy the premiums and cover can be structured in a number of different ways.

Who are they for?

This type of assurance is appropriate where a lump sum is required upon the premature death/critical illness of the person covered.  The lump sum can then be used in a number of ways.

• When invested can provide long term security for beneficiaries or dependants
• Can be used to repay a debt.
• Can be used to pay an Inheritance Tax liability.

How do they work?

The options with Whole of Life policies are:

• Standard cover provides a sum assured from a premium which should remain the same throughout life.
• Maximum cover provides the highest initial sum assured.  The sum assured is guaranteed until the first plan review (usually in ten years).  At that point either the sum assured will reduce significantly or, if you wish to maintain the same level of cover, the premium will increase significantly to take into account your current age.  No further medical evidence will be required unless you increase the cover.
• Intermediate cover allows you to structure your policy so that the contribution level lies between the standard and maximum cover.  Once again, the sum assured will be reviewed at the first plan review.  No further medical evidence will be required unless you increase the cover.
• A proportion of each contribution you pay, less any service fee, is invested in a fund or funds of your choice.  Each month a deduction is made from the units to pay for life cover and, if selected, critical illness cover.  This fund is then used by the insurer to suppress future increases in premium.  The higher the level of cover selected, the less will be invested in your fund.

Tax Situation

The proceeds from Whole of Life policies are free from personal tax.