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Whole of life assurance

Whole of Life Plans pay out a sum assured whenever the life assured dies. No expiry date is applicable as is the case with a Term Assurance. As a claim is guaranteed, premiums will be more expensive than a Term Assurance where a claim is merely possible.

Under a Unit Linked contract premiums are effectively paid into an investment pot and the cost of insurance is deducted each month, with the residual funds being invested. The cost of insurance increases with age, however, this is offset by the fact that a fund has built up and only the difference between the sum assured and the cash value of the plan needs to be insured.

Whole of Life Assurance premiums can be calculated on several bases:

• Balanced Cover means that the premium calculated will remain constant throughout life provided the provider’s investment and mortality assumptions are met.


• Maximum Cover premiums are the cheapest as companies quote a minimum premium necessary to cover the risk for the first ten years. After ten years and with no investment reserves to meet the increased cost of cover it would be necessary to raise future premiums.