When the time comes to start looking for Life Insurance, you will probably think that it should be a simple task to do. After all, how hard could it be to find a policy that will protect you for the future? Which will inevitably involve spending a lot of time trying to figure out which policy would best suit your situation. Part of your research will find that there isn’t just one type of Life Insurance product to buy, but many different types and they all vary. With three main types of cover available, which includes Whole Of Life Insurance, Level Term and Decreasing Term. You may start to wonder if finding the right policy with the best benefits is possible.
A common misunderstanding many people make is that a Whole Of Life Insurance is the most obvious option to choose. This is because a policy will make a guaranteed claim payment, irrespective of how old you are when you pass away. Although it will make sure that your family and loved ones are looked after for the future financially. This type of Life Insurance protection is always more expensive than term based policies. Which always raises the questions about, “is whole of life insurance worth it?”
To help you understand the benefits and pitfalls, our guide will cover:
Is A Whole of Life Insurance Policy Right For Me?
For some individuals, a whole of life insurance is worth it. It will however require a lot of different things to think about including what you need from your Life Insurance Cover and if the benefits outweigh the negative points of this policy type.
If you are the main provider for your family or household, then whole of life insurance might be worth it at any cost. This is because as long you keep up with the monthly payments, your whole of life insurance policy will protect you for the remainder of your life.
Working Out The Cost Of A Policy
An easy way to work out whether whole of life insurance is worth it for you, is to do some basic maths to work out how much it may cost. If you have decided on a benefit amount (an amount you want to provide to your loved ones) A straightforward way of doing that is to add up how long it takes for your monthly premiums to add up to the protection that you need.
For example, if you wanted to leave a claim payment of £50,000 for your family when you pass away and your monthly premiums are £100, it will take you 500 payments. Which if you were to work out in years would take approximately 41 years to save the same amount if you paid £100 into a savings account every month.
A very important thing to bear in mind is paying more than your family may benefit. If you were to purchase a Whole of Life policy when you are aged 35 and paid your monthly premiums until your 76th birthday, before you have paid more to the Life Insurance provider than they’ll eventually pay to your family and loved ones.
The hope for everyone is that, provided you remain fit and healthy the likelihood of reaching an older age is quite high. Unfortunately a lifetime can have many different problems to face, Life Insurance is a level of protection for the unexpected. If the unexpected did happen before you reach the age of 76. Your family and loved ones would receive the guaranteed £50,000 claim payment irrespective of how many monthly premiums you may have paid.
Is Peace Of Mind Worth More Than The Monthly Premiums?
If the monthly premium cost of paying for your whole of life insurance policy is not a key point for you.
Or, if you were to take out a whole of Life policy when you are a little bit older, it will definitely be worth more to you and your family as calculated above. Could peace of mind be another way to work out how ‘worth it’ whole of life insurance could be?
By choosing to buy a whole of Life Insurance policy, would allow you to go about your everyday life. Safe with the knowledge that you’re family and loved ones will have a financial safety net. Which for many people is one of the most important decisions that they have to make.
If you think that you would like the comfort of knowing that your family and loved ones will benefit from your whole of life insurance policy after you pass away. Then peace of mind, might be the deciding factor for you and your family’s future.
However, if you decide that you would like to buy a Life Insurance policy it is important to either do your research. Or use an FCA regulated broker, like Life Insurance Cover who can help you navigate all of the different Insurance Companies. At Life Insurance Cover we can answer any questions you may have and ensure you get the best policy at the right monthly price for you.
How Does A Whole Of Life Policy Compare With A Term Life Policy?
The main differences between a Whole of life policy and term based Life Insurance are the length of protection, monthly premium and when a potential claim payment could be made.
With a Whole of Life Insurance policy will make a claim payment at any period in your lifetime. However, a Term Based Life policy will only make a claim payment during a fixed term, which is also referred to as the duration of the policy.
How each policy type compares in terms of being worth it to you, will be decided by:
Your individual needs and situation.
What you need your Life Insurance Cover to protect.
The monthly premium costs for today and the long term.
If you are seeking complete peace of mind that your family will receive a claim payment for a lump sum of money. Then choosing a Whole Of Life Insurance policy could be the best decision for you and your family’s long term future. However, if you only need a protection policy to protect a specific debt, like a mortgage, then a Term Based policy could be best for you.
If you are unsure which policy type could be the right decision, with the best benefits for your family, then getting a free no obligation quote for both types of policy could help you. At Life Insurance Cover we help people find the best protection for their families. We can help you with all the different policies available, including whole of life insurance. Also we can help you choose the right protection and monthly premiums for you.
The Pros & Cons Of Whole Of Life Insurance?
As with all things in the world, there are both benefits and negative points to a Whole Of Life Insurance policy. It is very important to understand both key points, as they could impact you during the length of a protection policy. Which will help you decide if it’s worth it for you.
Benefits of a Whole Of Life Insurance policy:
Your protection policy will make a claim payment to your family, with no time restrictions for the future unlike a Term Based Policy.
You can choose to write your Life Insurance Cover into a trust, which could mean that your family would not pay any inheritance tax on claim payment they receive.
In certain circumstance, your loved ones will receive more from your Whole Of Life Insurance policy, than you had paid in.
The Negatives Of A Whole Of Life Insurance Policy:
By choosing a Whole of life insurance policy will be a more expensive per month when compared with a Term Based policy.
Preparing for monthly premium costs for the future, by deciding on Whole Of Life Insurance you will continue paying your monthly premium throughout your entire life. This could mean that you will probably have to commit some of your pension to paying the monthly costs.
With both policy types, if you miss any monthly premium payments. Without speaking to your provider the policy could become invalid even if you continue making payments afterwards. Therefore it is important to contact them if you begin to struggle financially.
Do I Need Whole Of Life Insurance Cover?
When it comes to the choice of policy and if whole of Life Insurance worth it, for you. You really need consider the advantages and disadvantages before you decide.
However, if you are still unsure about the advantages or the disadvantages or if it’s something you really need. Simply complete our no obligation quote form and our expert team can help you decide. Our team have extensive experience with all the different types of Life Insurance protection. They can also answer all your questions that you may have.
To get more information on whole of life insurance cover and decide if it’s worth it for you then speaking with an experienced life insurance advisor is a good idea.
Compare Whole Of Life With Us
We understand all of the many potential Life Insurance cover options and can help you choose the best policy for your needs. At Life Insurance Cover we understand that each person’s needs are different, our specialist team will compare all of the providers to find the best protection for you and your family.