Whole of Life Assurance:
This type of plan is taken
out for one's lifetime (and not a set term), and pays out a lump sum on death
whenever it occurs. It is particularly helpful for, amongst other things,
Inheritance Tax planning, and may be an important part of an Inheritance Tax
mitigation plan. See our Taxation page for more
on IHT planning.
The product is unsuitable
as a savings plan. If you were to cancel such a plan at any time, you
might not get any money back. It is designed to provide life assurance cover,
and in order to maintain that cover, you will need to keep paying premiums for
the rest of your life.
Your premiums are paid
into an investment fund, the value of which may go down as well as up. Each
month money is withdrawn from the fund to pay for your life assurance
cover.
There are two levels of
cover available - Standard and Maximum:
Standard cover:
This is the level of cover normally recommended. With Standard cover, if
the quoted target investment return is achieved, the amount of cover
should be maintained at the same level without the need for future increases in
your premium. However, this is not guaranteed.
Maximum cover: This
is the maximum amount of cover available under the plan and allows you to keep
the costs down until the first plan review, usually after 10 years. At this and
subsequent reviews (normally be carried out at 5 yearly intervals), you will
probably need to increase your premiums by a substantial amount to maintain your
cover.
 
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