Whole of life Policies Guide

Apr 18, 2024 | Insurance, Investments, Protection

Understanding Whole of Life Policies

Securing the financial future of your loved ones is a priority that sits at the top of many to-do lists.
Enter whole-of-life policies—a type of life insurance designed to offer peace of mind, knowing that your family will be financially protected, regardless of when life’s final curtain call arrives. Unlike term insurance, which is like renting coverage for a specific period, whole-of-life insurance is akin to owning a lifelong safety net. This comprehensive guide will walk you through everything you need to know about whole-of-life policies, helping you make an informed decision in safeguarding your family’s tomorrow.

What Are Whole of Life Policies?

At its core, a whole-of-life policy is an insurance contract designed to last a lifetime. It guarantees a payout upon the policyholder’s death, provided premiums are paid diligently. This assurance of a payout, regardless of when death occurs, distinguishes it from term policies, which only pay out if the insured person dies within a specified timeframe.

Types of Whole-of-Life Policies

Whole-of-life policies come in various forms, each with its unique features, benefits, and considerations.

Let’s break down the three main types:

  • Non-Profit Whole of Life Policies

  • Fixed Sum Payout: These policies guarantee a fixed sum to be paid out upon death, akin to term insurance but with a lifetime cover.

  • Premium Options: You can choose between guaranteed premiums, which remain constant, or reviewable premiums, which may be cheaper initially but can increase over time.

  • With-Profits Whole of Life Policies

  • Investment Element: A portion of your premiums is invested, with the potential to earn bonuses, increasing the eventual payout.

  • Bonuses and Market Value Reduction: Bonuses can boost the sum insured, though they’re not guaranteed. In contrast, a market value reduction (MVR) may decrease the surrender value in adverse conditions, though it’s not applied upon death.

  • Unit-Linked Whole of Life Policies
  • Investment Flexibility: Premiums buy units in selected funds, offering the growth potential.
  • Policy Value Adjustments: The policy’s value can fluctuate with the fund’s performance, allowing for adjustments in coverage and premiums over time.

Choosing the Right Whole of Life Policy

Deciding on the right policy hinges on balancing protection needs with investment aspirations. Consider the following:

  • Financial Goals: Are you looking for straightforward life cover, or are you aiming to combine protection with investment growth?
  • Premium Affordability: Higher premiums might offer greater benefits. It’s crucial to weigh the cost against potential returns and coverage needs.

Pros and Cons of Whole-of-Life Policies

Whole-of-life policies offer a blend of security and potential for financial growth, but they’re not one-size-fits-all.

Here’s a quick rundown:


  • Lifetime coverage ensures a payout no matter when death occurs.
  • Potential for investment growth, especially in with-profits and unit-linked policies.


  • Higher premiums compared to term insurance.
  • Investment risks can affect policy values, particularly in unit-linked policies.


Q: Can I cash in a whole-of-life policy?

A: Yes, but the surrender value may be lower than the total premiums paid, especially in the early years.

Q: Are whole-of-life policies worth it?

A: It depends on your financial goals, age, and premium affordability. They offer lifelong coverage and can be a part of estate planning, but they require a long-term financial commitment.


Whole-of-life policies embody a promise of financial security for your loved ones, blending lifelong coverage with potential investment benefits. Whether you’re leaning towards the guaranteed simplicity of non-profit policies, the growth potential of with-profits, or the flexibility of unit-linked options, understanding your needs and goals is key. Remember, the best policy is one that aligns with your long-term financial planning, offering peace of mind that your family’s future is secure. Consider consulting with a financial advisor to navigate the complexities of whole-of-life insurance and make a choice that best suits your unique situation.

This communication is for informational purposes only based on our understanding of current legislation and practices which are subject to change and are not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

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Schedule an Obligation-free Call With an Adviser

By scheduling an appointment with an adviser they will reach out to you at your requested time. 
Personal advice, whenever it suits you.

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