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)