We’ve listed some of the reasons that might help you decide if a Whole of Life cover is suited to your needs.
There is no maximum term for a Whole of Life cover – it pays out a lump sum whenever you die. So, provided you continue to pay your premiums until the end of your plan and your claim is valid, you can be sure you’ll leave something behind for your loved ones.
You can use a Whole of Life policy to insure against any inheritance tax your family have to pay on your estate. So when you die and if you have the appropriate level of cover in place, the payout on death could take care of a tax bill, and your loved ones get everything you leave behind.
For couples who want to use Whole of Life Cover in this way, there is also the option of a Joint Life Second Death policy which will pay out after both have died.
*We have made every effort to ensure it is accurate but accept no responsibility for our interpretation of the law, or future change in the law.
Even if there is no inheritance tax to pay on your estate, the lump sum could help your family in other ways. For instance, it could help with funeral costs and other immediate expenses.
It could also help your dependents with longer-term living costs if they rely on your pension. For example, you might have built up your own pension, rather than getting a guaranteed pension from your employer. If this is the case, the amount it pays your family might be much less after you die. A lump sum from your Whole of Life Cover can help make up the shortfall and give your dependents peace of mind that they have money to help pay the bills.
Lots of people want to leave something behind for their family to enjoy. So, the lump sum could just be a gift for your loved ones. Your children could use it to pay off their mortgage – or put it towards the cost of your grandchildren’s education.
If inheritance tax rules change or your estate goes up in value, you can increase your cover.
Most providers offer Guaranteed Premiums for life cover. If you select this option and make no changes to your plan, you can be sure that your premiums will always remain the same.
Published March 2021.
It is important to take professional advice before making any decision relating to your personal finances. Information within this case study is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for information purposes only.
As a Mortgage Broker, Jay has worked for some of the industry's most prestigious companies for over 8 years. At a crucial point in their lives, Jay helps individuals and business owners connect with lenders, and he does so by finding the best possible match based on the borrower's financial standing and desired interest rate.