What is Whole of Life Insurance?
Whole of life insurance lasts the whole of your life time, its designed to offer you complete cover through your life so you know your family will be protected. As long as you continue to pay your premiums it guarantees your family a pay out when you die. The premiums remain the same throughout your life, so you won't pay more in five years time. For this reasons its cheaper if you buy the insurance when you are younger and healthier.
Whole of Life Insurance Compared To Term Insurance
Whole of life is a better option financially when you compare it to term insurance, because term insurance will only run for a set period of time, the money you spend on insurance premiums could be wasted. This won't happen with a whole of life policy, and as long as you keep up to date with your premiums your family will be guaranteed a payout. Although with term insurance you have the option of having increasing or decreasing term, which means the insurance payout will increase or decrease. This can be useful when protecting against a mortgage or inflation.
The Advantages of Whole of Life
The biggest benefit to whole of life is that it will cover the whole of your life. This guarantees that you family will be financially secure should anything happen to you, and insures that your money isn't wasted. The second advantage is that the premiums are guaranteed, so you won't end up paying more money in five years time, even if you are diagnosed with a serious or critical illness.
Lower The Costs Of Whole Of Life Insurance
If you would like whole of life insurance but are finding the premiums too expensive there are a couple of ways you can reduce the cost. The first is by lowering the amount of the cover. Having less insurance is better than having no insurance. The second is by removing any add-ons like critical illness which may have been added. This isn't advisable as it will mean you are left unprotected even if your family aren't, however it is a way to reduce the premium cost.
Add-On Critical Illness Cover
Critical illness cover is a popular add on because it pays out a lump sum to the policy holder should they be diagnosed with a critical illness. There is also serious illness cover which is similar to critical illness but offers cover for a wider variety of illnesses. This can cost more but provides cover for 161 conditions in comparison to the 40 – 50 that average critical illness policies offer. It tends to be cheaper to buy critical illness cover as an add-on to a whole of life policy rather than taking it out on its own.
What To Look For When Comparing Insurance
Comparing insurance providers is the best way to make sure you are getting the best deal, although that doesn't always come down to price. With all products when it comes to cost you get what you pay for. The polices we quote for are all comprehensive policies with guaranteed premiums. This means that in five years your insurance won't suddenly jump in price. If you do need any help and advice make sure you speak to an adviser. The advisers at QuoteSupermarket are dedicated to helping you find the best insurance policy for the best price, so if you do need any help comparing policies – just ask.
Life Insurance in Trust
Writing your whole of life insurance into a trust is a simple process, and means that your insurance money doesn’t go through probate, a legal process, in which a nominated loved one needs to be granted access. Instead the insurance company process the payment and the money goes directly to the loved ones. Having fast and simple access can eliminate some of the trauma your loved ones will have to go through.
Easier and Faster Access
Putting your life insurance policy into trust has major benefits and is a fairly simple process. Writing the life insurance policy into trust will allow your loved ones easier and faster access to the money. You decide who your beneficiaries are and your insurance payout will be paid directly to them. This is very important if the insurance payment is being used to cover funeral costs, or mortgage payments as it will allow your beneficiaries to have easier and faster access to the money.
Avoid Inheritance Tax
Trusts have the ability to sidestep inheritance tax. Instead of the lump sum from your life insurance becoming part of your legal estate it goes directly to your beneficiaries. If your estate then doesn’t reach a specific amount, your family won’t have to pay inheritance tax. Putting a policy into trust is a simple process and our advisers can help guide you through this. It also offers the added benefit of allowing you to make sure that the money left goes to those intended and not to any creditors.