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Whole Life Insurance at Headlinehouse

If you've paid for life insurance over a period of, say, 20 to 30 years, and your cover comes to an end, a 'traditional' life insurance policy would pay your family nothing if you died at any point after the end of the policy's term. Many see this as an unreasonable state of affairs, so whole life insurance was developed to fill this gap.

Whole life insurance is similar to term life insurance in that a fixed premium is paid each year but in the case of whole life insurance, the term is not fixed and the policy remains in force for as long as the premium remains paid.

Because a whole life insurance policy is more expensive and has an investment component, it can also be used as collateral against which to secure a loan. It has the advantage that payment will definitely occur; thus providing a guaranteed return, hopefully delayed by some considerable years, on the investment.

For many, whole life insurance is more attractive than term life insurance cover but it is more expensive. In fact, most have narrow financial requirements to meet via their life insurance cover. They simply don't want their loved-ones thrown out of the family home by defaulting on the mortgage payments, thus they choose to cover the cost of redeeming the mortgage upon their premature death. Under such circumstances, whole life insurance is simply not necessary.

Obviously, if whole life insurance is attactive to you, this is something to take account of when filling in your quote form to generate lots of quotes via our automated system. Some people use it to offset inheritance tax costs; so that their Estate is in less need of being broken up to meet these inheritance tax costs. There are more efficient and tax-economic ways to offset this cost, however, therefore it is difficult to recommend whole life insurance for this purpose alone.

With regard to the latter issue of minimising the impact of inheritance tax, the 'money' pages of any good newspaper, for example, offer regular features on this issue. What is best varies from year to year owing to economic variations and tax changes.

Whole life insurance is increasingly being offered as an option by life insurance providers; so it does appear to be gaining some momentum in the UK and across Europe. For those more competitive policies where the additional cost is not excessive in comparison to a fixed term policy, perhaps there is something to be said for choosing the guaranteed return.

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