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Whole of life insurance is a type of permanent life insurance that guarantees a payout to your beneficiaries no matter when you pass away, as long as the policy is active. Unlike term insurance, which only covers a set period, whole of life cover lasts your entire life. This can provide your loved ones with financial support for things like paying off debts, covering funeral costs, or even leaving an inheritance.
When you take out a whole life insurance policy, you agree to pay regular premiums, either monthly or annually. In return, the insurer promises a fixed payout amount when you pass away. Here’s a breakdown of how it works:
The value of whole of life insurance depends on your individual needs and financial goals. Here are some factors to consider:
The cost of whole life insurance varies based on several factors:
For example, a healthy 40-year-old could expect to pay around £50 to £150 per month for a medium coverage amount, depending on lifestyle and health status. Always compare whole life insurance rates with Ascot to find the best option for your needs.
The payout, also called the sum assured, depends on what you choose when setting up the policy. Typical amounts range from £100,000 to over £1 million. This figure is guaranteed, meaning your beneficiaries will receive the full amount when you pass away. Many use this to:
Usually, the whole of life insurance pay-out is tax-free. However, if your total estate exceeds the inheritance tax threshold, your beneficiaries may owe inheritance tax on the payout. Planning ahead can help minimise this impact.
Tip: Placing your policy in a trust can help ensure the payout isn’t subject to inheritance tax. Always consult with us for personalised advice.
Yes, one of the biggest benefits of a whole of life cover is that it is guaranteed to pay out as long as you keep up with your premium payments. This makes it a reliable financial planning tool, especially for families wanting long-term security.
No, whole life insurance does not expire. As long as you pay your premiums, the policy will remain active for your entire life, guaranteeing coverage.
Yes, but it depends on the policy type. Some whole life insurance policies accumulate a cash value, which you can withdraw or borrow against. However, cashing in your policy early can reduce the payout your beneficiaries receive or leave you with less than you’ve paid in premiums.
Choosing between term life insurance and whole of life insurance depends on your needs:
To find the best whole life insurance rates, it’s essential to compare quotes from multiple providers. Many online comparison tools make this process simple. Make sure to consider:
Speak with Ascot Mortgages to tailor a policy to your specific needs.
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Yes, joint whole of life insurance policies are available, usually designed for couples. The payout is typically made after the first or second death, depending on the policy type.
Getting whole of life insurance with health issues is possible, but expect higher premiums. Some insurers offer guaranteed acceptance plans, although these may come with limitations.
The payout is generally tax-free, but it could be subject to inheritance tax. Using a trust can help mitigate this risk.
It can be, especially if you want lifelong coverage or have specific financial goals, like covering estate taxes or leaving a legacy. Consider your financial situation and long-term plans.
Life insurance typically refers to term policies that provide coverage for a set period, while life assurance (like whole life) guarantees a payout whenever you pass away.
Neither is better universally; it depends on your needs. Term is cost-effective for short-term needs, while whole of life insurance provides permanent coverage.
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