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Whole of life insurance - 5 useful facts

Unsure about whole of life insurance and why you might need it? This easy-to-understand guide explains the basics of this type of life insurance for over 50s.

Last updated 16th May 2019

Whole of life insurance made simple

Unsure about whole of life insurance and why you might need it?

This easy-to-understand guide explains the basics of this type of life insurance for over 50s.

Here’s our top five whole of life insurance facts

  1. Whole of life insurance lasts as long as you do – giving you lifelong protection
  2. You can choose your monthly premiums
  3. A guaranteed cash sum will be paid to your loved ones when you die
  4. You often don’t need to answer medial questions to take out whole of life cover – depending on the provider you choose
  5. Depending how long you live – you might end up paying in more than is paid out

Think whole of life insurance might be right for you? Read on to find out more.

What is whole of life insurance?

The clue is in the name. Very simply, whole of life insurance is life cover that lasts a lifetime.

Unlike term insurance that covers you for a set period of time, with a whole of life policy, cover only ends when you die.

This is why it’s also known as whole of life assurance – it covers the inevitable and is certain to pay out.

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How does whole of life insurance work?

You pay a premium every month and in return you’re covered for a set amount of money.

When you die, your next of kin make a claim and your policy pays out this money – often referred to as the payout.

Some whole life insurance policies allow you to stop paying premiums at a certain age.

Cover remains in force, but you no longer have to pay. This can be particularly helpful if you prefer to know the maximum time you could be paying premiums for.

Why should I have whole of life insurance?

People often choose this type of insurance as a way to leave some money for their children, grandchildren or a charity.

Another popular reason is to help pay towards their funeral costs and ease the financial burden on those left to sort out their affairs.

Some people take out a whole of life policy to help cover any inheritance tax bill. When you die, inheritance tax is charged at 40% on all assets worth more than £325,000*.

This means that your family will need to pay the tax bill before they can access the funds in your estate.

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How do you pay for whole of life insurance?

Like most insurance, the quote you receive will state the premium you’ll need to pay. This premium must be paid every month, so make sure you’re comfortable you can keep up the payments, for what could be many years to come.

With some policies you pay a set amount every month and get a set amount of cover in return. Fixing your premiums in this way means you know where you stand from day one and can be confident there’ll be no nasty surprises further down the line.

The flipside of having this certainty is that by the time a claim is made on your policy, inflation will reduce how much the payout will be able to buy.

How much does whole of life insurance cost?

Whole of life insurance is generally a more expensive type of life cover as the payout is guaranteed and no health questions are asked.

This means that insurers know they will need to payout.

What affects your premiums?

How much you pay each month will depend on the following things:

  • Your provider
  • Your age
  • The sum assured you want your loved ones to receive
  • With some providers, you will need to disclose how much you drink or smoke, which will also affect your premiums
father-son-granddaughter-looking-at-book

What is no-medical life insurance?

Life insurance often requires the person applying to have a medical or answer health questions.

The insurer then sets the cash payout and premium based on the results or could decline the application altogether.

No-medical life insurance guarantees to accept anyone who applies, regardless of their health, without any form of medical questioning.

This can become more appealing later in life when health tends to become more of a concern and is why over 50 life cover is often a popular choice.

This type of whole of life insurance usually has to run for a set length of time – one or two years – before the cash payout can be claimed when you die.

If you die within that time, usually as a minimum, the total of the premiums you’ve paid will be refunded to your estate.

Different insurers will also each have varying terms and conditions around accidental death cover. So if you were to die because of an accident, the provider might pay you a different amount than if you were to die within the first waiting period.

Always be sure to read terms and conditions before committing to any insurance.

What you need to know about paying for SunLife’s over 50s life cover

SunLife’s Guaranteed Over 50s Plan is a whole of life insurance policy which provides cover for the rest of your life.

If you stop paying your premiums your insurance will end and you won't get anything back.

If you die within the first year we'll pay out everything you've paid in.

Depending on how long you live, you could pay more in premiums than the cash sum paid out.

Inflation reduces the buying power of the cash sum over time.

For more details, take a look at how SunLife’s over 50s life cover works, which includes an example of what would be paid out if you died within the first year.

*Inheritance tax figures applicable to 2018/19

Here's the information that you need to know about who we are and the other companies that we work with in order to provide our products and services.

Who are SunLife?

Phoenix Life Limited trades as SunLife and is the provider of the Guaranteed Over 50 Plan, SunLife Insurance and the life insurance policy payment option for Funeral Plans. Phoenix Life Limited’s registered office is at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 1016269). 

SunLife Limited distributes financial products and services and is a company limited by shares, registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 05460862). SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (registration no. 769427).

You can contact us by post at SunLife, PO Box 1395, Peterborough, PE2 2TR or by phone on 0800 008 6060.

If you choose to add Funeral Benefit Option to your Guaranteed Over 50 Plan, Dignity Funerals Ltd arranges and provides the funeral services, registered office: 4 King Edwards Court, Sutton Coldfield, West Midlands, B73 6AP (registered in England and Wales, No. 00041598). Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

Who provides the Funeral Plans?

Dignity Funerals Ltd arranges and provides the funeral services, registered office: 4 King Edwards Court, Sutton Coldfield, West Midlands, B73 6AP (registered in England and Wales, No. 00041598). Dignity Funerals is not authorised or regulated for this activity by either the Financial Conduct Authority or the Prudential Regulation Authority. Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

The life insurance policy that pays for your funeral will be provided by Phoenix Life Limited, trading as SunLife.

Who provides My Smarter (ISA)?

My Smarter (ISA) is provided by Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority. Details can be found on the Financial Services register, registration No. 188832. Member of The Investment Association. Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.

Who provides the Will writing services?

Hugh James is authorised and regulated by the Solicitors Regulation Authority (SRA Number:303202).

The information contained on this website is based on Hugh James' understanding of the law of intestacy in England and Wales only as at April 2014. The law in Scotland and Northern Ireland is significantly different. This is for information purposes and is not intended to be legal advice.

Who provides SunLife Pet Insurance

SunLife Pet Insurance is arranged and administered by BDML Connect Limited. BDML Connect Limited is authorised and regulated by the Financial Conduct Authority (No. 309140). Registered in England and Wales Number 02785540. Registered Office: 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB.

Who provides SunLife Home Insurance

SunLife Home Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.

Who provides SunLife Car Insurance

SunLife Car Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.