Is Whole of Life Insurance Worth it?

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What is a whole of life insurance policy?

When looking at life insurance policies available to you, whole of life insurance jumps out as the true core of the system – a policy that pays out when you die, no matter when that is.

It’s simple, astoundingly effective and guaranteed.

The benefits of whole of life cover

The best life insurance policies are those that are tailored to suit your exact needs. Decreasing term insurance, for example, is a type of cover perfectly designed for covering any outstanding mortgage balance should the main breadwinner pass away before the house is fully paid for.

Whole of life insurance is more encompassing – it does exactly what it says, covering the whole of your life and guaranteeing a substantial payment when you die. No matter when that is, nor how it happens, you go knowing that your family are provided for in the manner you intended.

The joy of security

Life insurance can give your loved ones the financial support they may need after your death. A whole of life policy, however, provides more than a simple monetary payment, it gives you a life of emotional security.

Those who have long enjoyed whole of life assurance don’t know what it’s like to wake up nervous about your family, fretting over what might happen to them should you pass away. The weight of financial responsibility is a heavy one and passing that burden on to your loved ones when you know that they will also be grieving can be a terrible worry.

Of all the pros and cons of whole of life cover, the emotional and psychological stability that comes from simply knowing that your family are safe even if the worst were to happen to you is perhaps the most underrated.

And your family set up doesn’t matter – whether the money-in-question is merely there to provide the expenses needed for your funeral, or a more complicated trust-fund situation to exempt them from the legal responsibility of inheritance tax, the joy of security is still the same.

You sleep well at night and go about your day without concern – sometimes worth the price of the premiums alone!

Guaranteed cover for life

Whole of life insurance doesn’t lie. When looking at how a whole of life policy works, there are no hidden catches or small print in the footer to invalidate your claim at any time, it does exactly what it is expected to – guarantees cover for life.

No one can know what is going to happen to them in the future, but a whole of life insurance policy will make one thing certain – your death won’t leave your family struggling.

Whole of life vs. term life insurance – are whole of life insurance policies worth it?

With cheaper premiums and potentially higher payouts, term life insurance policies can be quite the headline stealer. So what is it about whole of life (WoL) cover that can possibly compare?

It’s about assurance vs. insurance. Though the terms are somewhat used interchangeably across the industry, the real meaning behind each one is different. Assurance, like a whole of life policy, is guaranteed – you are assured that the sum will be paid at some point, no matter how long you live. Insurance, on the other hand, is protection against a specific event and isn’t guaranteed. Indeed, with term insurance, you could pay into your policy for decades and yet outlive it, meaning that your family will see no financial benefit from all that investment.

But of course, you lived, so it’s not a bad thing!

With whole of life assurance meaning that the policy will definitely be paid, it makes sense that the premiums must cover that end payment (otherwise insurance companies would quickly go bust!). When you take out the policy, your insurance company will make a somewhat callous calculation based on your expected lifespan and adjust your premiums accordingly to make sure that barring an accident, you will eventually pay for your policy in full.

Term life insurance is more of a gamble for the insurance company – they offer a massive payout for relatively small premiums because they are betting on you outliving the term. In these cases (which are most of them, thankfully for all concerned), the insurer makes a solid profit, and everyone is happy.

Is whole of life insurance a good investment for retirement?

There’s a reasonable argument that instead of paying your policy, you’d be better off putting the money into a savings account. Using some simple figures, if you paid £100 per month into a savings account, and lived for 42 years, you’d have £50,000. Yet, if you paid £100 as a premium to a whole of life insurance policy for a £50,000 payout then after 42 years you’d have paid in that and have no savings to speak of.

Can it be that savings are better?

The difference goes back to the security. If you passed away from an accident ten years into your savings, your family would have £12,000 to show for it. With the whole of life policy, they’d be paid £50,000.

Can you guarantee you’ll never have an accident in 42 years? Sadly, no.

Whole of life insurance is not a savings plan, or a replacement for a pension. You will never be able to use the money yourself – it goes to your loved ones after you are gone, but is whole of life insurance a good investment? We think so, and so do the families of those who have benefitted from this level of future-planning.

Over 50s whole of life insurance

Standard whole of life policies are based on your age and health. As you get older, that means policies become more expensive and, for some who have suffered a serious medical condition, almost impossible to afford.

The specialised over 50s life insurance plan is guaranteed whole of life insurance without a medical report or any other uncomfortable questions. As long as you are over 50, you will qualify and be able to take advantage of this excellent product.

While the premiums are a little higher than standard whole of life assurance due to the slightly riskier nature of the policy for the insurance companies, they are designed to be affordable and properly suited to those who have retired and are living on a pension.

For more information on over 50s life insurance, read our article here or simply give us a call.

Getting the best whole of life insurance quote!

At Quick Quote Protect, we work with the top life insurance providers in the UK to get you the most suitable quote possible.

Our advisors are fully trained in every aspect of life insurance and will discuss your needs for a whole of life insurance policy with you, helping you understand the options and making sure you get something affordable and properly tailored to your requirements.

Give us a call today or fill in our short contact form for more information.