Whole of Life Assurance

Whole of Life Assurance Advice: Protection and Insurance

Factfile: Whole of Life Assurance

A Brief Description:

Whole Of Life polices provide life assurance cover for the whole of your life and can be taken out in four forms:

• Flexible Whole Of Life
• Whole Of Life Without Profits
• Whole Of Life With Profits
• Low Cost Whole Of Life With Profits

Regular premiums payable: Yes

Guaranteed Premiums Available: Yes - but only for certain types

Reviewable Premiums Available: Yes - but only for certain types

Life Insurance included: Yes

Critical Illness Insurance included: Can be added as an option

Income Protection Insurance included: No

Period of Cover: Open Ended

Increase Cover option: Yes normally medical evidence required unless special events such as marriage, new children, further mortgage options included

Decrease Cover option: Yes

Waiver of Premium option: Yes - for certain types

Lump sum pay out: Yes

Regular amount pay out: No

Any investment cash in value: Yes - for certain types

Tax Benefits:

• Private policies - Benefits are tax free
• Business policies - premiums or benefits are potentially subject to tax incentives, not usually both

Benefits can be put in trust: Yes

Suitable For:

• Adults
• Family Protection
• Mortgage Protection - not usually used for this though
• Inheritance Tax Planning
• Business Protection - not usually used for this though

Insolvency Compensation Limits: Insurance Company Funds - 90% of total funds invested.  No Limit.

For help with you whole of life assurance, contact us.

1.  Flexible Life Assurance

Factfile: Flexible Whole of Life Assurance

Brief Description:

This type of contract is unit linked, meaning that the premiums buy units in one or more of the life insurance company's funds.  The cost of life cover is calculated on a monthly basis and the relevant amount of units are cancelled to pay for it.  Whatever is left, stays invested in your chosen fund.  The contract is called 'flexible' because the level of cover can be changed in accordance with a person's needs.  If you needed a high level of cover at the start, the majority of your premiums would go towards buying the cover.  If you then needed less cover, the sum assured could be reduced and more of your premiums would go towards savings in the policy.  It is usual for these policies to be guaranteed for ten years and then reviewed in line with your age at that time.  If you need to keep the sum assured at the same level, you will probably be asked to increase your premiums.  However, if you do not need as much cover, your premiums can stay the same and the sum assured can reduce.

Regular premiums payable: Yes

Guaranteed Premiums Available: No - reviewed normally at 5 or 10 years

Reviewable Premiums Available: Yes

Life Insurance included: Yes

There are three levels of cover:

• Minimum - this provides the minimum amount of life assurance cover with the majority of the premium going towards investment funds.
• Balanced - this generally provides an equal balance between life cover and savings element.
• Maximum - this provides the maximum amount of life cover you can have for your chosen premium and a low investment content - at the 5 or 10 year review, the premiums have a very high chance of significant increase to continue the life cover at the same level as there is limited investment to build up a fund to cover these increased costs

Critical Illness Insurance included: Can be added as an option

Income Protection Insurance included: No

Period of Cover: Open Ended

Increase Cover option: Yes normally medical evidence required unless special events such as marriage, new children, further mortgage options included

Decrease Cover option: Yes

Waiver of Premium option: Yes - for certain types

Lump sum pay out: Yes

Regular amount pay out: No

Any investment cash in value: Yes - residual unit values only depending upon level of cover selected

Tax Benefits:

• Private policies - Benefits are tax free
• Business policies - premiums or benefits are potentially subject to tax incentives, not usually both

Benefits can be put in trust: Yes

Suitable For:

• Adults
• Family Protection
• Mortgage Protection - not usually used for this though
• Inheritance Tax Planning
• Business Protection - not usually used for this though

Insolvency Compensation Limits: Insurance Company Funds - 90% of total funds invested.  No Limit.

2.  Profits Life Assurance: Protection and Insurance Advice 

Factfile: Whole of Life Assurance without Profits or Non Profits Whole of Life

Brief Description:

With this type of Whole Of Life policy, a fixed sum assured is paid out on death, whenever it happens.  Premiums are normally payable throughout life although some contracts are set up so that premiums are only paid up to a certain age.  This is one of the cheapest forms of Whole of Life cover.

Regular premiums payable: Yes

Guaranteed Premiums Available: Yes

Reviewable Premiums Available: No

Life Insurance included: Yes

Critical Illness Insurance included: option not normally available

Income Protection Insurance included: No

Period of Cover: Open Ended

Increase Cover option: Yes normally medical evidence required

Decrease Cover option: Yes

Waiver of Premium option: No

Lump sum pay out: Yes

Regular amount pay out: Yes

Any investment cash in value: No

Tax Benefits:

• Private policies - Benefits are tax free
• Business policies - premiums or benefits are potentially subject to tax incentives, not usually both

Benefits can be put in trust: Yes

Suitable For:

• Adults
• Family Protection
• Mortgage Protection - not usually used for this though
• Inheritance Tax Planning
• Business Protection - not usually used for this though
• Insolvency Compensation Limits: Insurance Company Funds - 90% of total funds invested.  No Limit.

Request our advice.

3.  Whole of Life With Profits: Protection and Insurance Advice

Factfile: With Profits Whole of Life Assurance - Full Cost Conventional Whole of Life

Brief Description:

This type of Whole of Life policy provides cover for the rest of your life.  With Profit investment bonuses are added to the sum assured throughout the term of the policy meaning the sum assured increases, giving you more cover.  The premiums for Whole Of Life With Profits cover will be more expensive than a policy without profits.

Regular premiums payable: Yes

Guaranteed Premiums Available: Yes

Reviewable Premiums Available: No

Life Insurance included: Yes

Critical Illness Insurance included: Can sometimes be added as an option

Income Protection Insurance included: No

Period of Cover: Open Ended

Increase Cover option: Yes normally medical evidence required unless special events such as marriage, new children, further mortgage options included

Decrease Cover option: Yes

Waiver of Premium option: Can sometimes be added as an option

Lump sum pay out: Yes

Regular amount pay out: No

Any investment cash in value: Yes

Tax Benefits:

• Private policies - Benefits are tax free
• Business policies - premiums or benefits are potentially subject to tax incentives, not usually both

Benefits can be put in trust: Yes

Suitable For:

• Adults
• Family Protection
• Mortgage Protection - not usually used for this though
• Inheritance Tax Planning
• Business Protection - not usually used for this though

Insolvency Compensation Limits: Insurance Company Funds - 90% of total funds invested.  No Limit.

4.  Low Cost Whole Life: Protection and Insurance Advice 

Factfile: Low Cost Whole Of Life With Profits Life Assurance

Brief Description:

The title does not mean it is a cheap form of whole of life cover.  It means it is cheaper than the full cost with profit whole of life cover.  This is a special type of Whole Of Life policy because when it is taken out, it is assumed that future investment bonuses will be added at a particular level.  If these assumptions were made correctly by the life assurance company, the level of life assurance cover will remain the same throughout the term of the policy.  If the actual bonuses paid are higher than assumed, more cover will be provided.  Conversely, if the actual bonuses paid are lower than assumed, less cover will be provided.  The costs for this cover are similar to a without profits or non profits contract but with risks attached.  

Regular premiums payable: Yes

Guaranteed Premiums Available: Yes

Reviewable Premiums Available: No

Life Insurance included: Yes

Critical Illness Insurance included: sometimes can be added as an option

Income Protection Insurance included: No

Period of Cover: Open Ended

Increase Cover option: Yes normally medical evidence required unless special events such as marriage, new children, further mortgage options included

Decrease Cover option: Yes

Waiver of Premium option: for some contracts

Lump sum pay out: Yes

Regular amount pay out: No

Any investment cash in value: Yes

Tax Benefits:

• Private policies - Benefits are tax free
• Business policies - premiums or benefits are potentially subject to tax incentives, not usually both

Benefits can be put in trust: Yes

Suitable For:

• Adults
• Family Protection
• Mortgage Protection - not usually used for this though
• Inheritance Tax Planning
• Business Protection - not usually used for this though

Insolvency Compensation Limits: Insurance Company Funds - 90% of total funds invested.  No Limit.

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