Whole-of-life insurance

A lifetime policy explained simply

Whole-of-life insurance is a policy that stays in force for as long as you live, provided you keep paying your premiums. Unlike term life insurance, which only covers a set number of years, whole-of-life policies pay a guaranteed cash sum when you die. For many UK households, that certainty supports long-term plans such as helping loved ones with ongoing costs, paying for funeral expenses, or addressing inheritance tax liabilities.

Recent UK market data shows strong and resilient demand for life insurance, with quarterly premiums consistently above £10bn since 2022 and around £13.85bn in Q1 2025. This tells us consumers value financial protection even in changing economic conditions. Whole-of-life cover is part of that picture, especially for people who want guaranteed payouts and a clear legacy plan.

It is important to set realistic expectations. Whole-of-life insurance typically costs more than term cover because it is designed to pay out whenever you die, not just within a fixed timeframe. In 2025, the average UK premium for whole-of-life is about £102 per month for an average sum assured of roughly £128,000. Your price will depend on age, health, smoking status, and the level of cover you choose.

Whole-of-life cover offers guaranteed protection for your entire lifetime, which is why it costs more than term life insurance.

This guide walks through how the cover works, who it suits, what affects price, how to apply, and the key questions to ask before you buy. The aim is to help you make a confident, informed decision in plain English.

What is covered and how claims are usually paid

Whole-of-life policies pay a lump sum to your beneficiaries when you die, whenever that occurs, as long as premiums are kept up to date. The payout can help with everyday living costs, funeral expenses, debt repayment, or estate planning goals. Some policies include terminal illness benefit that pays out early if you are diagnosed with a terminal condition as defined by the insurer.

Insurers will not cover everything. Common exclusions include non-disclosure of medical history, fraud, and in some cases a waiting period for certain causes of death on guaranteed acceptance plans. If you stop paying premiums, cover may lapse and no payout would be due. Policies that build a small cash value may allow premium holidays, but this varies by insurer and is not a guarantee.

When a claim is made, your beneficiaries will usually need the death certificate, the policy document, proof of identity, and a completed claim form. If a trust is in place, trustees handle the process, which can speed up payment and help with inheritance tax planning. Claims are typically assessed quickly and leading UK insurers report life claims payout rates around 97%, which is reassuring for families relying on the benefit.

A simple example: if you buy £150,000 of whole-of-life cover and keep paying premiums, your estate or trustees receive £150,000 on your death. If the policy is written in trust, the money can usually be paid directly to beneficiaries, helping them avoid probate delays and potentially reducing inheritance tax exposure when structured appropriately.

Who benefits most

Whole-of-life cover is useful for people who prioritise certainty. If you want a guaranteed payout to support loved ones, cover funeral costs, or help meet inheritance tax liabilities, this policy type offers lifelong protection. It is also commonly chosen by over-50s who prefer guaranteed acceptance plans with fixed premiums and a simple application, acknowledging that medical underwriting might otherwise make cover harder to obtain.

It may be less suitable if you only need protection for a specific period, such as until the mortgage is repaid or children are financially independent. In that case, term life insurance is usually far cheaper, with typical UK averages around £20 to £25 per month for comparable sums assured. Whole-of-life is about certainty rather than the lowest cost, so it suits those who value a guaranteed legacy and have a budget to match.

Choosing your cover level

1. Entry-level whole-of-life

   • Fixed lump sum, simple terms, often chosen for funeral costs.
   • Lower sums assured to keep premiums affordable.
   • May offer guaranteed acceptance at certain ages, often with initial waiting periods.

2. Standard whole-of-life

   • Moderate sums assured aimed at supporting family living costs and debts.
   • Medical underwriting required for accurate pricing.
   • Option to place the policy in trust for smoother payout and estate planning.

3. Comprehensive whole-of-life

   • Higher sums assured for legacy and inheritance tax planning.
   • More flexible features, such as joint life options or limited-pay periods.
   • Premiums are higher due to larger cover amounts and added features.

4. Optional add-ons and variants

   • Indexation: increases the sum assured each year to help keep pace with inflation.
   • Waiver of premium: maintains cover if you cannot work due to illness as defined.
   • Joint life: pays out on first death or second death, depending on estate plans.
   • Limited-pay: pay premiums for a fixed period, then remain covered for life.

Choose a level of cover that matches your goal: funeral provision, family support, or estate planning.

Costs and what drives your premium

Prices are illustrative, not guaranteed. Always compare like-for-like features before deciding.

Who can apply and what insurers check

Most UK adults can apply for whole-of-life cover. Age limits vary, but standard policies often accept applications from early adulthood up to later life, while guaranteed acceptance plans usually target the over-50s within specific age bands. You will be asked to provide personal details, your medical history, lifestyle information, and the level of cover you want. Medical evidence may be requested, such as a GP report or nurse screening, depending on your answers and the sum assured.

Common reasons for decline include undisclosed medical conditions, very high risk health factors, or attempting to secure a level of cover that does not align with declared information. Guaranteed acceptance policies reduce medical questions but may include a waiting period before full cover begins. Placing the policy in trust is often recommended for estate planning, but always check the legal implications and seek advice if unsure.

From quote to claim in simple steps

1. Gather your goals, budget, and approximate cover amount.
2. Get quotes for whole-of-life and term to compare value clearly.
3. Review features: indexation, waiver, joint life, and trusts.
4. Complete the application truthfully with medical and lifestyle details.
5. Provide any requested medical evidence promptly to avoid delays.
6. Receive your offer, check premiums, exclusions, and documents carefully.
7. Set up payment, place in trust if appropriate, and store documents safely.
8. For claims, contact the insurer or trustee, submit forms and certificates.

Balanced view of benefits and drawbacks

Whole-of-life suits certainty-led goals. If you only need time-limited protection, term life is usually more cost-effective.

Key checks before you commit

Before buying, read the policy booklet and key facts document line by line. Confirm exactly what is covered, exclusions, any waiting periods, and the circumstances that could void a claim. Check whether premiums are fixed or reviewable, how indexation works, and how the sum assured can change over time. If you are considering a guaranteed acceptance plan, understand any initial period where accidental death may be covered but natural causes are not. If using a trust, make sure the correct form is completed and stored safely. Keep copies of all documents and tell your beneficiaries or trustees where to find them.

Alternatives that might fit better

1. Term life insurance
   • Usually far cheaper for time-limited needs like mortgages or childcare years.
2. Family income benefit
   • Pays a monthly income rather than a lump sum for a chosen term.
3. Over-50s life cover
   • Guaranteed acceptance with simple terms for smaller sums assured.
4. Critical illness cover
   • Lump sum on diagnosis of specified serious illnesses within the term.
5. Income protection
   • Replaces part of your income if you cannot work due to illness or injury.

Frequently asked questions

Q: Why is whole-of-life more expensive than term life? A: Whole-of-life pays out whenever you die, so the insurer is certain to pay a claim. Term cover only applies for a set period. The guaranteed lifetime payout is the main reason for higher premiums.

Q: What is the average cost in the UK? A: Recent figures suggest around £102 per month for an average sum assured near £128,000. Your price depends on age, health, smoking status, and cover features, so quotes can vary considerably.

Q: How do age and smoking affect price? A: Premiums increase sharply with age and are significantly higher for smokers. A 40-year-old smoker may pay almost double a non-smoker. Buying earlier and maintaining a healthy lifestyle can reduce long-term costs.

Q: Can this help with inheritance tax? A: Yes. Whole-of-life policies are often written in trust to help beneficiaries receive funds promptly and support inheritance tax planning. The right structure matters, so consider professional advice for complex estates.

Q: How reliable are UK insurers at paying claims? A: UK life insurers maintain strong capital positions and report high life claims payout rates around 97%. This indicates resilience and reliability, including for whole-of-life policies.

Q: What happens if I stop paying? A: If premiums stop, the policy may lapse and provide no benefit. Some products with cash value features can offer limited flexibility, but this is not guaranteed and depends on your specific policy.

Q: Should I choose indexation? A: Indexation increases your sum assured each year to help keep pace with inflation. It can maintain real value but will raise premiums over time. Consider your budget and long-term goals.

What to do next

If lifelong protection fits your goals, compare quotes with the same cover amount, features, and payment structure. Read the documents carefully, check exclusions and waiting periods, and consider placing the policy in trust. Take your time. The right decision is the one that balances certainty, affordability, and your family’s needs.

Important note

This guide provides general information, not personal financial advice. Policy terms, features, and prices vary by insurer. Always read your documents carefully and consider regulated advice if you are unsure about suitability or tax implications.