What is Whole of Life Insurance?

As the name implies, whole of life insurance is a policy that covers the policyholder’s lifetime. It is paid out to your family when you pass away.

It’s different from term life insurance, which is if you die within a set period the policy runs for.

Can you have multiple policies?

You can have as many whole of life policies as you want, in theory. More policies mean you could have more payouts and are likely covered for more eventualities. However, more policies means more expense, so it does depend on how much you’re willing to spend.

Situations change. For example, you could have taken out a policy to cover payment on your mortgage. However, if you then get a bigger mortgage and have a growing family, you can purchase additional policies to meet your evolving needs.

Whole of life insurance vs term life insurance

When deciding what life insurance is better for you, ask yourself the goal(s) of your insurance.

Term life insurance might be suited to you if:

- You’re only looking to cover a set period, such as your mortgage term, then term life insurance could be a good option.

- If you have children and want to ensure any educational fees are covered if you’re not around.

Whole of life insurance might be suited to you if:

- You want lifetime coverage.

- You have a dependant who will need lifetime financial support, such as a child with specialist needs.

- You want to ensure your funeral expenses are covered regardless of when you die.

How much whole of life cover do you need?

This depends on your circumstances. For example, those with a partner, children, a mortgage and other debts will likely require a bigger payout than someone single without children or other debts.

If you are single, life insurance can cover the cost of your funeral and pay off any debts you may have without your loved ones worrying about this.

You may also want to check if you have any other types of automatic life cover in place. For example, your employer might offer a death-in-service payout. This is usually 3-4 times the amount of your salary.

How do you pay for it?

You can either pay a lump sum at the outset, or a premium each month.

Does whole of life insurance ever expire?

Whole of life insurance doesn’t expire.

How does it get paid out?

The claims process has three stages. Firstly, notification, which is enacted by contacting the provider. The beneficiary will require the policy number, information about who they are, details of their relationship with the policyholder and the policyholder’s doctor’s details.

After this, the beneficiary will need to complete a claim form that’s returned to the insurer. More information may need to be provided - such as a death certificate - depending on the circumstances.

Finally, the payout itself. When the paperwork is completed, payment is made to the beneficiary.