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        Updated: April 17, 2024

        A Guide to the Different Types of Whole Life Insurance Policies

        Which type of whole life insurance is the right one for you? Take a look through our comprehensive guide before making a final decision.

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        We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in whole of life insurance. Ask us a question and we'll get the best expert to help.

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        Guaranteed whole life insurance, also referred to as life assurance, permanent whole life insurance or full life insurance, is a type of cover that financially protects your loved ones in the event of your death.

        A great appeal for many people looking for life insurance is that some types of policies also offers a cash value to its customers which, in some circumstances, can be used to borrow against or spend.

        But don’t be in a haste to sign an agreement. Even if you’re considering ordinary whole life insurance policies, it’s best to get advice and be clear on the other whole life insurance types that could be better suited to you.

        What are the different types of whole life insurance?

        With a broad spectrum of whole life insurance policy types to choose from, it’s always a good idea to do your research to determine which one can offer you full life insurance cover while also being the most financially beneficial option for you.

        We’ve listed the most commonly sought-after whole of life insurance types below but, for further information and to have an expert assess which types of whole life insurance policies are best for you, speak to an insurance advisor. Call 0808 189 0463 or make an enquiry and we’ll connect you with one of the insurance experts we work with.

        All the experts we work with are independent advisors with access to insurance providers across the whole market. They will be able to help you understand which policy type might suit you best and then find you the right policy at the best possible price. The service we offer is free and there’s absolutely no obligation.

        Traditional whole life insurance

        This type of insurance can be a great way of leaving money to your beneficiaries or covering an inheritance tax bill while also having the option to enjoy some of the funds you have earned as a cash value.

        At the start of your traditional whole life insurance agreement, you would be given a guaranteed minimum rate of return on your cash value portion. Over time and through paying your premiums, that cash value can grow.

        Some customers decide to release and spend some of their cash value, while others keep it in their account and allow it to accumulate.

        Flexible whole life insurance

        Flexible whole life insurance can sometimes be referred to as adjustable whole life insurance.

        Ahead of signing a flexible whole life insurance agreement, the insurance provider will ask you to choose between a minimum and maximum level of guaranteed insurance to meet your needs.

        The amount chosen, as well as other factors such as health and age expectancy, can affect the price of your premiums. Opting for less guaranteed cover mean that you, in certain circumstances, pay less for your premiums.

        This isn’t always the best route for everyone. However, a higher level of insurance cover could prevent any potential claim issues for your beneficiaries.

        Furthermore, with some flexible whole life policies, even though the insurance cover continues until death, the premiums you pay may cease at an agreed age. This can be a great benefit for some customers who no longer have to pay for their premiums yet still have guaranteed cover.

        Universal life insurance

        Whole life insurance can offer a guaranteed cash value with an agreed level of cover while a universal life insurance policy can be more flexible with additional options such as death benefits.

        An appealing factor to consider is that some universal life insurance policies let you vary your premium payments over the course of your agreement. This is usually due to the performance of the underlying investments.

        You may also be able to adjust your death benefit clause. This can be helpful if the needs of your beneficiaries’ change. The flexibility of universal life insurance is often a reason why it is referred to as a variable whole life insurance policy.

        Limited whole life insurance

        Limited whole life insurance, is for an individual who owns a whole life insurance policy but chooses to pay for the total cost of their premiums for a limited number of years.

        With the limited pay life insurance option, you pay premiums in the first 10, 15 or 20 years of ownership, but the benefits last a lifetime.

        Custom whole life insurance

        Custom whole life insurance policies offer life protection for people up to age 100, although there are variations of the criteria that each insurer will offer.

        Because of their nature, custom whole life insurance plans can be personalised to suit your needs.

        As well as a guaranteed cash value, this type of plan offers non-guaranteed dividends which can be used to accumulate your wealth.

        Participating full life insurance companies

        Some whole life insurance providers pay dividends to their customers which are paid out of the company’s profits for that year. These can fluctuate based on the company’s performance and are therefore not guaranteed. These are often known as “with profits” policies.

        If you receive dividends from a participating or non-participating whole of life policy, you will have the choice to take your dividends as cash, use them to pay your premiums or use them to purchase additional insurance to increase your policy’s face value.

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        What’s the difference between term life insurance and whole life insurance?

        Whole of life insurance is designed to cover you right up until death while term life insurance provides cover for an agreed period of time, most often for 10, 15 or 20 years.

        With term insurance, there’s a very real chance that you’ll outlive the term of your policy and therefore never see a payout. This type of policy is often used to cover the term of a mortgage or for people with a family who want to ensure the financial security of their dependents for as long as their children remain in full-time education.

        This would result in your beneficiaries receiving no payout, so always check the terms and end date of your term life insurance to avoid this happening or alternatively, seek the advice of an insurance advisor.

        There is also no cash value with a term policy and this can affect the price you pay for your premiums. In fact, the price of term life insurance can generally, but not always, work out lower as you’re paying for less cover.

        Is whole life insurance more expensive?

        You may find that individual whole life insurance can be more expensive because as well as paying for your cover, your premiums also contribute towards saving a cash value.

        Keep in mind that the cost of your premiums really does rely on many factors including your own health, age and the level of cover you need and with the help of an advisor, you can find the best level of protection for the most affordable price.

        As well as this, the process of finding the best whole of life insurance policy can be much quicker with their assistance as they have access to a database with numerous insurance providers across the UK.

        Call 0808 189 0463 or make a quick enquiry and we’ll connect you with one of the expert insurance advisors we work with. They’ll be happy to answer your questions and save you time and hassle by gathering quotes on your behalf before advising you which policy offers you the best cover for the most favourable price.

        The service we offer is free and there’s no obligation.

        Can I get guaranteed whole life insurance for seniors?

        Depending on your personal circumstances and the level of cover you need, it may be possible with the help of an insurance advisor to get guaranteed whole life insurance for seniors.

        Some insurance companies can charge higher premiums to seniors as their criteria dictate that the higher the risk of death, the higher the cost of the insurance.

        That being said, other factors such as your lifestyle, medical history and health can affect the price you pay.

        An insurance advisor will know which companies can provide you with the best level of cover for the lowest price. They’ll also be able to thoroughly check any whole life insurance contracts to identify any clauses or terms that could be problematic in the future.

        Speak to an expert about whole life insurance

        To find the right whole of life insurance type, you need to feel confident that what the insurer is offering you can meet your needs.

        Think about the level of cover, the payout that you want to leave to your beneficiaries and whether or not you would like to build a cash value throughout your agreement.

        We have insurance advisors on hand and ready to answer you questions. It’s free, fast and completely confidential, so call 0808 189 0463 or make a quick enquiry for a life insurance quote.

        Ask a quick question

        We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in whole of life insurance. Ask us a question and we'll get the best expert to help.

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        Pete Mugleston

        Pete Mugleston

        Mortgage Expert, MD

        About the author

        Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

        Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

        FCA Disclaimer

        *Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

        Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.