Whole Of Life Insurance - Red Sky Insurance

Whole Of Life Insurance

Whole Of Life Insurance

A whole life insurance policy pays out a guaranteed lump sum when you die, no matter when your death takes place.

This makes it different from the most common form of cover which is term insurance. Whole life insurance is more expensive than other insurances but for some people, the cost is worth it.

Whole of life cover works much like any life insurance policy. When you take out whole of life cover, your insurer will charge you monthly or annual premiums to maintain your cover. Once you pass away, your loved ones will benefit from tax free payout* to help cover any costs they need help with.

Typically, these include funeral costs, debt, inheritance tax liability or paying towards the cost of long term care. The cost of a whole life insurance policy can be affected by many things such as your age, height, weight or if your employed in a high-risk job and if you smoke. Overall, it’s down to you the amount of cover you choose. Whole of life will remain valid as long as you keep paying your premiums however, some providers stop taking your premiums once you reach the age of 90, but your cover will remain in place for the rest of your life.

*policies placed in trust will payout without incurring any tax liability (this is subject to change)

Things To Consider

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    You may want to consider life insurance if you have a mortgage and you want to leave a debt free estate, or if there are people who rely on you financially, like your partner or children. Life insurance can also help cover the cost of funerals, or even if you want to leave your children something when you pass away.
    Life insurance can be set up to cover a specific length of time or even for the whole of your life. Various factors will determine the cost, such as age, health and level of cover. You can control who the money will be paid to and for how long you want the policy to be in place.
    Under current tax rules, pay-outs for critical illness, terminal illness and death claims are usually free of personal liability to pay income tax and capital gains tax. However, in some circumstances your pay-out may be subject to inheritance tax. You can normally help avoid this by putting your plan in trust. Bear in mind that the law relating to tax may change in the future. (For tax planning, we act as introducers only)
    When you choose to take out a life insurance policy with one of our providers, they pay us a commission. Our service is always fee-free.
    This depends on your individual circumstances as the amount of cover required is often different for each family. If you are married, have a large mortgage and four children then you are likely to need more cover than a single parent living in a rented flat with one child.
    Yes, you can have more than one life insurance policy.
    Many couples take out joint life insurance policies, due to the convenience and in order to save money, as it is cheaper than taking out policies on an individual basis. However, joint life insurance usually only pays out once, on the first death, leaving the surviving partner without cover.

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