Whole of life insurance provides lifetime cover with a guaranteed payout when you die - not if. Unlike term insurance which expires after a set period, whole of life insurance ensures your loved ones receive financial support whenever you pass away.
This makes it ideal for covering funeral expenses, leaving an inheritance, or providing for dependents with lifelong care needs.
Our whole-of-market comparison service helps you find the best whole of life quotes from over 50 UK insurers.
Whole of life insurance is a type of policy that provides cover for your entire life and pays out a cash sum when you die - not if you die.
This makes it a form of 'life assurance' as your policy is assured to payout, in contrast to term life insurance which only pays out if you die within a specific term.
Key features of whole of life insurance:
Cover lasts for your entire life
Guaranteed payout when you die
Fixed payout amount (doesn't decrease)
Premiums paid for life (or until a set age)
Can be written in trust to avoid inheritance tax
Often includes terminal illness cover
Maximum cover typically £1,000,000
Because the policy guarantees a payout, whole of life insurance is more expensive than term insurance. However, it provides certainty that your loved ones will receive financial support.
How does whole of life insurance work?
Apply for cover: Complete a medical questionnaire and choose your cover amount
Pay premiums for life: Make regular premium payments for the rest of your life (or until a specified age, typically 90)
Guaranteed payout: When you die, your beneficiaries receive the full payout amount tax-free
Write in trust (optional): Protect the payout from inheritance tax by writing the policy in trust
Premium options:
You can typically choose between:
Premium Payment Options
Whole of life premiums: Pay premiums for your entire life until you die
Maximum age premiums: Pay premiums until a set age (e.g., 90), then cover continues for free
Reviewable premiums: Lower initial premiums that may increase based on insurer performance reviews
Guaranteed premiums: Fixed premiums that never change (typically more expensive initially)
Who needs whole of life insurance?
Ideal Candidates
Covering funeral costs: Ensure your family doesn't have to pay £4,000+ for your funeral
Leaving an inheritance: Guarantee a specific amount for loved ones or charitable causes
Covering inheritance tax: If you have a large estate, provide funds to pay the 40% tax bill
Lifelong dependents: Provide for children or relatives with disabilities who will need lifelong support
Business succession: Fund buy-sell agreements or provide business continuity
Not suitable for:
- Temporary protection needs (mortgage, childcare) - use term insurance instead
- Those on tight budgets (term insurance provides more cover for less money)
- Short-term financial commitments
Whole of life vs term insurance
Whole of Life vs Term Life Insurance
Feature
Whole of Life
Term Insurance
Duration
Entire life
Fixed term (e.g., 25 years)
Payout
Guaranteed (when you die)
Only if you die during term
Cost
More expensive
Cheaper
Premiums
Paid for life (or to max age)
Fixed term payments
Best for
Inheritance, funeral costs
Temporary needs (mortgage)
Cash value
Some policies build cash value
No cash value
Both provide tax-free payouts and can include terminal illness cover.
Example cost comparison:
For £100,000 cover, a 40-year-old non-smoker might pay:
- Term insurance (25 years): £10-15/month
- Whole of life: £50-80/month
While whole of life is more expensive monthly, it's the only option that guarantees a payout.
Frequently Asked Questions
How much does whole of life insurance cost?
Whole of life insurance is more expensive than term insurance because it guarantees a payout. A 40-year-old non-smoker might pay £50-80 per month for £100,000 of cover. Premiums depend on your age, health, smoking status, and whether you choose reviewable or guaranteed premiums.
Do premiums increase with age?
It depends on your policy type. Guaranteed premium policies have fixed payments that never change. Reviewable premium policies start cheaper but may increase after reviews (typically every 10 years). Some policies allow you to pay until a maximum age (e.g., 90), after which cover continues for free.
Can I cash in my whole of life policy?
Some whole of life policies build up a cash value (called investment or unit-linked policies) that you can cash in or borrow against. However, this will reduce or cancel your cover. Non-profit policies typically have little to no cash value.
What happens if I stop paying premiums?
If you stop paying, your policy will usually lapse and you'll lose cover. Some policies offer 'paid-up' options where you can stop payments in exchange for reduced cover. It's important to maintain payments to ensure the guaranteed payout.
Can I get whole of life insurance at any age?
Most insurers offer whole of life insurance between ages 18-85, though some have lower maximum ages. The older you are when you apply, the higher your premiums will be. It's more cost-effective to take out cover when you're younger.
Should I write it in trust?
Yes, writing your whole of life policy in trust is highly recommended. This removes the payout from your estate, meaning your beneficiaries avoid inheritance tax (40% on amounts over £325,000) and receive the money faster (bypassing probate). We offer free trust writing services.
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