Whole of life insurance

Whole-of-life insurance offers ongoing cover to help protect your family. See how it works and compare now.

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If you’ve started a family or just bought a house, it may be time to consider getting life insurance. While some policies only offer cover for a certain period of time, whole of life insurance will protect you for as long as you need.

Find out if this type of life insurance is right for you below.

What is whole of life insurance?

Whole of life insurance is a comprehensive type of life insurance policy that will cover you for your entire life. In the event of your death, your dependants will receive a lump sum payment, also known as the sum insured.

Unlike term insurance, which only covers you for a set period of time, whole of life insurance protects you for as long as you continue to pay your premium. Where some term insurance will also reduce the size of your sum insured over time, this type of insurance will pay out the same amount regardless of when you happen to pass away.

How does whole of life insurance work?

You pay your premium each month and are then covered for the full amount of your sum insured for as long as you continue to make your payments.

If you are still insured at the time of your death, your family will receive the sum insured amount.

What are the benefits of whole of life cover?

It can offer more certainty and peace of mind compared to term life insurance, as your premium and the sum insured remain the same. However, some insurers may review your policy after a certain period of time, for example, 10 years, and may then increase the size of your premium.

Another benefit of whole of life insurance is for families looking to minimise the effect of inheritance tax. This is charged at 40% for assets worth over £325,000, which generally includes your home. Life insurance pay-outs are not taxed, so by taking out whole of life cover as part of a trust, you can help offset the tax you have to pay.

Who is whole of life insurance suitable for?

This type of insurance is suitable for those who want the security of ongoing cover, and a stable sum insured amount. Unlike term insurance, whole of life insurance offers cover for the rest of your life and may therefore be a more attractive option for those who want comprehensive, straightforward cover.

It may also be suitable for individuals or families with valuable assets that are likely to be subject to inheritance tax.

What types of whole of life policies are there?

There are two types of whole of life insurance. These are:

  • Balanced cover. With balanced cover, your premiums and the size of your sum insured amount stay the same over time.
  • Maximum cover. Your premiums are put into an investment fund, meaning your eventual pay-out may be higher than with balanced cover. Your premiums may also be increased, or the size of your pay-out reduced, depending on how the fund performs.

What does whole of life insurance cover?

It covers you in the event that you pass away from an accident or natural causes, including illness and old age.

What doesn’t it cover

Like most types of life insurance, there are certain exclusions that will not be covered under whole of life cover. These include:

  • Death due to drugs or alcohol
  • Death as a result of war or terrorism
  • Suicide or self-inflicted injuries
  • Death as a result of gross negligence or reckless behaviour

How much is whole of life cover cost?

As it offers ongoing cover, whole of life insurance can be more expensive than term life insurance. Where some term insurance policies reduce the size of your pay-out over time, whole of life insurance has a sum insured amount that is always the same, which means the cost of your premium will remain high.

What can I do to bring down my premiums?

There are a number of things you can do to reduce the cost of your insurance premiums, such as:

  • Live a healthier life. Insurers consider your general health when calculating your insurance premium. By eating healthier, exercising and refraining from activities like drinking and smoking, you can help reduce the amount you pay for insurance.
  • Shop around. While not every insurance company may offer whole of life cover, you should always compare as many policies as possible before picking the one that is right for you. Some insurers may also offer occasional discounts or deals for new customers.

Get the right level of cover. Your sum insured amount plays a big role in determining the size of your premium. By opting for a low pay-out amount, you will pay less for insurance.

Compare life insurance providers

Data indicated here is updated regularly
Name Product Cover options Age range at application Cover amount Pays out % claims paid Offer Link
Aegon
Aegon
Level term cover, decreasing term cover, increasing term cover, whole of life cover and family income benefit.
18-84
£1million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
96%
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AIG
AIG
Level term cover, decreasing term cover, increasing term cover, whole of life cover and family income benefit.
18-84
£1million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
96%
£75 Amazon giftcard. Terms and conditions apply.
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Aviva
Level term cover and decreasing term cover.
18-89
£5million
If you die or get a terminal illness and aren’t expected to live longer than 12 months.
98.9%
£75 Amazon giftcard. Terms and conditions apply.
Go to site
HSBC
Level term cover and decreasing term cover.
17-69
£250,000
If policyholder dies, the sum decided will be paid out.
100%
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LV=
LV=
Level term cover and decreasing term cover.
17-79
£10million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid
99%
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Royal London
Level term cover and decreasing term cover.
18-70
£500,000
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
99.7%
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Scottish Widows
Level term cover and decreasing term cover.
18-64
£2million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
99%
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Vitality
Level term cover, indexed term cover, decreasing term cover and family income term cover.
16-74
£20million
If a policyholder dies or is diagnosed with a terminal illness, critial illness could lead to an earlier payment.
99.8%
£100 Amazon giftcard. Terms and conditions apply.
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Zurich
Level term cover.
16 - 83
£40million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
99%
£100 Amazon giftcard. Terms and conditions apply.
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Legal & General
Level term cover.
18-77
£3million
If a policyholder dies or is diagnosed with a terminal illness, sum will be paid.
97%
Up to £150 amazon.co.uk or M&S gift card with life cover.
Go to site
Canada Life
Canada Life
Level term cover, increasing term cover and decreasing term cover.
18-80
£1million
If you die or get a terminal illness and aren’t expected to live longer than 12 months.
100%
The Canada Life app, access to discounts and benefits.
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