Whole of Life Insurance
This policy that will insure you for the entirety of your life providing you pay your premiums.
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We understand that paving the way for the next generation is something that is important to many of us. Opting for a Whole of Life Insurance policy allows you to ensure that your family and loved ones are not burdened by inheritance tax.
It allows you the opportunity to pass on your assets in a tax-efficient manner.
It allows you the opportunity to pass on your assets in a tax-efficient manner.
Benefits of Whole of Life Insurance
Opting for a Whole of Life Insurance policy will offer you certainty. Should you continue to pay the premiums, you have peace of mind knowing there will be something left behind.
- Guaranteed Premiums
- Fixed Inheritance
- Tax-Efficient
We have outlined the benefits associated with Whole of Life cover in our guide. You are welcome to read it and contact our team for further assistance.
Why Choose emero?
We ensure you get the most suitable coverage for your specific needs.
Experienced Advisors
Our team of fully qualified advisors with upwards of 50+ years of combined industry experience.
Whole Market Quotes
We have no affiliation with one insurer meaning we can compare the market to get you the right cover.
Simple Process
Our streamlined process allows you to get the correct cover in a time-efficient manner.
Experienced Advisors
Our team of fully qualified advisors with upwards of 50+ years of combined industry experience.
Whole Market Quotes
We have no affiliation with one insurer meaning we can compare the market to get you the right cover.
Simple Process
Our streamlined process allows you to get the correct cover in a time-efficient manner.
A Whole of Life Insurance policy is popular among those who want to know for definite that there will be something left behind for friends or family. A Whole of Life Insurance is more expensive than Term Life Insurance as it guarantees a payout when you pass away.
However, it provides comprehensive cover along with providing peace of mind that those left behind will be financially secure.
What is Whole of Life Insurance?
Whole of life insurance is a Life Insurance policy that will insure you for the entirety of your life providing you pay your premiums.
As there is no fixed term, the policy will not expire and will pay out on your death. These Whole of Life policies can be used to help families pay inheritance tax on assets left behind.
How does a Whole of Life Insurance policy work?
A Whole of Life policy works similar to any other insurance policy. At the outset you will decide how much cover you need and pay a monthly premium via direct debit to maintain the cover.
However, if you opted for the guaranteed Whole of Life cover, these premiums will not increase.
Once you die, your beneficiaries will receive a lump sum.
Should you choose Whole of Life or Term Insurance?
Your personal circumstance will determine the policy most suitable for you. A Whole of Life policy is more expensive than a Term Insurance policy.
However, it comes with the certainty of knowing there will be a payment at the end providing you pay your premiums.
There is a trade-off between the additional cost of your premiums and the surety it provides.
Which is best for you?
Each policy has specific benefits.
- Term Life Insurance is finite. It will cover you for a set number of years. Often until your kids are financially independent.
- Whole of Life Insurance pays out on your death. Therefore, it is suitable to those who want to ensure their family are financially secure following their death.
Did you know ❓
Some providers have attractive additional benefits built into their Whole of Life offering. Royal London offers a ‘Life Changes Option’. For an additional 10% on your premium, you have the cash back option.
This allows you to take an immediate cash back amount and end your policy after 15 years.
Types of Whole of Life Insurance
When choosing a life insurance policy, you will have different types of cover available. Your personal circumstance and budget will help you choose which is most appropriate for your situation.
Single cover
A single Whole of Life policy will cover a single person only. When that person dies, the policy pays out.
Joint life
Within joint life there can be two separate policies.
- Joint life, first death – This policy will cover two people but will pay out on the death of the first person. Only one payment is made and it is made on the death of the first person only.
- Joint life, second death – This will also cover two people but a lump sum is paid out on the death of the second person. Again, only one payment is made and it is following the death of the second person.
Dual cover
Dual cover consists of two policies. The insurance company will pay out a lump sum on the death of both the first and second person.
However, following the death of the first person, premiums must continue to be paid to ensure a lump sum is also paid following the second death.
Guaranteed Whole of Life Insurance
With a guaranteed Whole of Life policy, the premiums are fixed. Although you pay a higher premium, it is set and will not increase over the duration of the policy.
There will be no reviews and no need to provide any evidence of good health or medical documentation. The only way premiums on a guaranteed whole of life policy may increase is if you choose an indexation option.
Choosing this indexation option will link your policy to inflation and the costs will increase each to keep in line with the rising cost of living.
Reviewable Whole of Life Insurance
If considering a Whole of Life policy, the reviewable would not be recommended.
With this type of policy, the insurer will review the premiums every 10 years. However, often the premiums will not increase until you reach age 60. After reaching 60, the premiums will start to rise significantly.
In some cases, premiums may double or triple in cost. Often the premiums become too expensive and the policyholder eventually cancels.
Unit Linked
With a unit-linked Whole of Life policy, the life insurance company invests your premiums into a fund. The life insurance company manages and hopes to grow the fund and increase in value over time.
However, these funds are not guaranteed to grow. In some cases, it may fall short of the amount needed to pay for the life insurance policy.
In this instance, you may be required to pay a higher premium.
Section 72
A Section 72 policy is a Life Insurance policy that is taken out from which the proceeds can be used specifically to pay an inheritance tax bill.
Any assets inherited by your beneficiaries that are over the relevant thresholds will be liable to Capital Acquisitions Tax (CAT). If you have beneficiaries who will not be in a position to pay such a tax bill or have a large estate, a Section 72 policy may be a suitable option.
It is worth noting that the premiums on a Section 72 policy must be paid by the person who is leaving the inheritance.
Calculating a potential inheritance tax bill
In Ireland, assets or inheritance may be liable to Capital Acquisitions Tax (CAT).
A potential Capital Acquisitions Tax (CAT) is calculated using two elements:
- Your relationship with the person who is passing on the asset or the inheritance. Also known as the disponer.
- The value of the inherited assets.
Within Ireland, there are three threshold groups. Each has a maximum limit. Assets above these thresholds are liable to Capital Acquisitions Tax (CAT).
Anything over this threshold is taxed at 33%.
Group | Relationship | Threshold |
A | Son/Daughter | €335,000 |
B | Blood relative (Niece, Nephew, Grandchild) | €32,500 |
C | Other | €16,250 |
How is Whole of Life Insurance taxed?
A Whole of Life policy differs from a standard Life Insurance policy. Particularly when it comes to Section 72 policies and those designed to pay an inheritance tax bill.
With a standard Life Insurance policy, there may be a tax liability. Life Insurance benefits are paid tax-free. However, the beneficiary may have a tax liability in some cases.
The liability will be dependent on the amount inherited and the relationship between the beneficiary and the disponer.
“ Inheritance tax and estate planning is a specialised area of advice. We would always recommend consulting with an expert before making a decision as any mistakes can be extremely costly”
emero Financial Planning Team
How much does Whole of Life Insurance cost?
A Whole of Life insurance policy will cost more than a level term policy. This is due to the fact, once you continue to pay your premiums, the insurer will eventually have to pay out.
There are also variables that will affect the specific cost of premiums. They will include:
- Age – the older you are taking out the policy the higher your premiums are likely to be.
- Health – any current or pre-existing health conditions will impact the cost of your policy.
- Smoking status – smoking will increase the cost of your premiums by up to 50%.
- Amount of cover – the level of cover required will directly impact your levels of premiums.
In certain circumstances, you may be required to answer additional questions during the application process. If you are unsure of how the process works or would like to assess your options, feel free to contact our team of advisors.
Compare Whole of Life Insurance
At emero, we compare Ireland’s leading Insurance providers.
Where can you buy Whole of Life Insurance?
As with other insurance policies, there are a couple of different options available.
- A bank – it may be an option to purchase life insurance through your bank. However, approach with caution as your bank is likely tied to one insurer. Therefore, they are unable to compare the entire market ensuring you get the best deal.
- An Insurance company – buying directly from an insurance company is another option. Again, with this option the insurer can only offer their own products.
- A broker – using a financial broker such as emero gives you multiple benefits. Not only can we scan the whole market, you would be dealing with someone who specialises in life insurance and assists clients on a daily basis.
Insurers in Ireland that provide Whole of Life Insurance cover
The three insurers in Ireland that provide Whole of Life Insurance cover are:
- Royal London
- Zurich
- Irish Life
Maximum available Life Cover on the policy
Insurance Provider | Maximum Cover |
Royal London | €10,000,000 |
Zurich | €3,000,000 |
Irish Life | €2,000,000 |
Why speak to emero?
As we have no allegiance to one particular insurer, we can assess the market and provide impartial advice.
We combine our experience assisting clients and compare additional benefits associated with each insurer. This means we can ensure our clients get the most suitable cover for their needs.
If you are considering a Whole of Life policy as part of your estate planning, emero can assist.
We offer a complimentary consultation if you would like to speak with a member of our team. This will allow you to assess your options and for us to answer any questions you may have.
Key Takeaways
- A Whole of Life Insurance policy guarantees there will be something left behind once premiums are paid.
- The type of policy you choose is important. Guaranteed should always be recommended over reviewable.
- A Whole of Life policy is more expensive but offers certainty and peace of mind.
- Purchasing Life Insurance through a broker will have multiple benefits.
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Whole of Life - Frequently Asked Questions (FAQ's)
A Whole of Life policy provides you with certainty. It is suitable for those who wish to have cover in place for the rest of their lives rather than a specified term.
Your policy is guaranteed to pay a benefit on your death provided you continually pay your premiums.
This sum of money (death benefit) can be used by your spouse/next-of-kin however they see fit. In some circumstances, you may be eligible to claim back a percentage of your premiums after a certain period of time.
Please contact our team if this is something you would like to discuss.
Any decision regarding a Life Insurance policy will depend on personal circumstances. If you have anyone who is financially dependent on you, a Life Insurance policy is usually advisable.
If there is no Life Insurance policy in place, funeral costs can often be left to family members. Whole of Life cover can also be used to assist with inheritance tax liabilities.
A Section 72 policy can be taken out where the proceeds can be used specifically to pay an inheritance tax bill. It will allow your beneficiaries to pay any Capital Acquisitions Tax (CAT) liabilities that may arise from your death.
Opting for a Whole of Life policy will offer several benefits such:
- Your policy will never expire providing you pay the premiums.
- Premiums will remain the same throughout the course of the policy (providing you choose the guaranteed option)
- A cash back value may be an option after a certain period of time in some cases.
- Peace of mind knowing that your family or loved ones will be taken care of financially.
Within Whole of Life Insurance, there is an option of a Section 72 policy. This policy will be used to pay inheritance tax when you die.
In Ireland, any inheritance tax liability is paid by the beneficiaries of your estate. If the value of your estate may be particularly large, a Section 72 policy may be advisable.
The sum insured under the Section 72 policy does not form part of your estate unless it is higher than the tax liability. Any amount higher than this threshold will be liable to inheritance tax.
A Whole of Life policy lasts for the entirety of your life. The only caveat is that you must continue to pay your premiums.
It is important to continuously pay your premiums if you want to ensure you are covered. Should you stop paying your premiums, your policy will lapse and you will be exposed.
Need more information?
Whole of Life Insurance Jargon Buster
| Term | Explanation |
|---|---|
| Accidental Death | Provided by the Life Company providing they receive the completed application form up until policy goes live. |
| Advanced payment of Specified Illness | Provides an advanced payment if the policyholder is in need of heart surgery. |
| Benefit Indexation | The percentage your benefit will increase by on an annual basis if you select indexation. |
| Children’s Cover | Provides a portion of free life cover for the policyholders’ children. |
| Childrens Hospital Cash | If hospital cash has been selected on the policy, the Life Company will provide a portion of the hospital cash to their children free of charge. |
| Free Childrens Specified Illness | If serious illness has been chosen, the Life Company will provide a portion of free serious illness cover for the policy holder’s children if diagnosed with one of the serious illnesses listed. |
| Guaranteed Insurability | The option to increase the sum insured by a certain amount without medical underwriting. |
| Guaranteed Premium | Your premium is guaranteed for the duration of your policy. |
| Hospital Cash Benefit | Pays a daily amount if in hospital for 7 days or more. |
| Medical 2nd Opinion | Life Company gives you the opportunity to have any historical illnesses reviewed by leading consultants. Also applies to any future illnesses. |
| Optional Reduction | If a plan has not ended, allows a client to reduce their cover. |
| Overseas Surgery Benefit | The Life Company will pay a lump sum if surgery needed as a result of one of the specified illness and the surgery cannot be provided in Ireland. |
| Personal Accident Benefit | The personal accident benefit is paid for each week a person is unable to work in their current occupation as a direct result of an accident. |
| Premium Holiday | This allows a client to take a break from paying premiums while keeping their policy in force. |
| Premium Indexation | The percentage your premium will increase by on annual basis if you select indexation. |
| Reinstatement Clause | Allows a client or their legal representatives to pay the unpaid premiums due on the policy within three months of the date on which the first unpaid premium was due and have the policy reinstated. Terminal Illness Benefit: If diagnosed with a terminal illness the Life Company will pay out the sum insured stated on the policy. Certain terms and conditions apply. |
| Section 72 | Certain Whole of Life policies can be used as Section 72 policies which is a policy to pay inheritance tax. |
| Surgical Cash Benefit | In the event that you require major surgery a client can receive a payment of a certain percentage of their serious illness benefit. |
| Total & Permanent Disability | This benefit is payable if a client or someone covered on their policy becomes permanently, totally and irreversibly unable to perform current working duties. |
| Unite Linked Premiums | Are used to purchase units in a fund that are invested. |
| Waiver of Premium | You do not have to pay any premiums whilst your benefit is being paid to you. |
Need help?
Our team of advisors are here to help you get the correct cover in place.
