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Whole life insurance provides a guaranteed fixed sum (sum assured) upon death of the life or lives assured. Whole life insurance is suitable for individuals who require a lump sum to be paid on their death, and is often used in inheritance tax (IHT) planning. Before considering taking out this type of cover we suggest you get financial advice.
- There is no income or CGT tax to pay and IHT can be avoided if the whole life insurance policy is placed in trust
- Can be arranged whereby premiums cease at a specified age e.g. 65, though the cost of this option is significant compared to a plan where the premiums are payable throughout life.
- The cover or sum assured can be linked to inflation
- It is possible to have a policy which also incorporates critical illness insurance.
- Premiums can be expensive for whole life insurance, particularly for older people and those in ill health
- Premiums are subject to reviews usually every 10 years, and premiums can increase if the respective life office does not achieve a satisfactory level of investment return
- Medical evidence will be required and possibly a medical examination for those in poor health
- There is a minimum premium - this is currently 25 pm approx.
If you want more information about whole life insurance and other types of life cover, we can put you in touch with an expert life insurance broker - just click on the link above.