What is Whole of Life Assurance?

The insurance industry is full of jargon, so the following are some commonly used terms to describe the types of Life cover that are available as Whole of Life Assurance or Whole of Life Insurance products.

Whilst the Financial Services Authority (FSA) distinguish the various Whole of Life Assurance products available as Whole of Life Insurance or Pure Protection policies the definitions used here are as those determined by the CII (Chartered Insurance Institute).

Generally whole of life assurance is a way of mitigating or reducing the financial effects of a terminal life event relating to your, your partner’s or family’s life. 

Death is a terminal life event covered by Whole of Life Assurance policies such as Non-Profit, With-Profit and Unit-Linked policies.

An adverse life event covered by Health Insurance is typically accident and sickness, critical illness or terminal illness.

Depending on the type of whole of life policy taken out by you or on your behalf, a payment will be made as a lump sum to the beneficiaries of the policy in the event of a claim being made on your death whenever that occurs.

 

What are the types of Whole of Life Assurance?

The following are the types of whole of life assurance available:-

  • Non-Profits policy pays out a lump sum to your beneficiaries on your death whenever death occurs. Like most Term Insurance they are protection only policies which have no investment element. Unlike Term Insurance, with-profits are permanent policies which are not limited to an expiry date.
  • With-Profits policy pays out a lump sum to your beneficiaries on your death whenever death occurs. With-profits are permanent policies which are not limited to an expiry date and provide benefits which indirectly affected by investment performance.
  • Unit-Linked policy pays out a lump sum to your beneficiaries on your death whenever death occurs. Unit-Linked are permanent policies which are not limited to an expiry date where the link with investment performance is direct.

 

Why should I take out Whole of Life Assurance?

There are a number of factors about an individual’s personal circumstances that will determine which of the types of whole of life assurance that may be applicable are based on their suitability, affordability and where an element of investment is involved, the level of risk you are prepared to take.

 

How should I take out Whole of Life Assurance policy?

The first and most important step after you have decided you may have a need for life assurance cover is to have a discussion with us to provide you with independent financial advice.

Once we have agreed what the most suitable type of whole of life policy is for your particular circumstances we make an application on your behalf to take out a protection policy based on how much you can afford and the amount of cover required, and where an investment element is involved the acceptable level of risk you are prepared to take to match your needs.

 

How do I pay for Whole of Life Assurance?

Once the amount of benefit you require has been determined your monthly payment or lump sum premium for protection under the policy or cover will be offered to you by the insurer’s underwriter after they have reviewed a completed personal questionnaire relating to your occupation and lifestyle including in some cases a medical report.

The premiums will be reviewable every one, three, five or ten years depending on the insurance provider i.e. the insurance company underwriting the policy.

 

Want to know more?

Talk to one of our qualified financial advisers on 01553 777600 or e-mail us at enquiries@ringassociates.co.uk

Also you may want to read the articles by accessing Directgov at the following website  http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/Insurance/index.htm?cids=Google_PPC&cre=Money

and the Financial Service Authority (FSA) consumer guide available on their website at http://www.moneymadeclear.fsa.gov.uk/print.aspx?Page=/products/insurance/types/income/life_insurance