THE WHOLE TRUTH (about whole life insurance)

AS ITS NAME suggests (and until recently it was called whole of life insurance), whole life insurance pays out whenever you die and is not limited to a specific period (other than your lifespan) like term life insurance.

Not surprisingly, the premiums work out dearer than with term assurance (the same as ‘insurance’) because of course the life insurance company is going to have to pay out at some point because, as we agreed at the start, we are all going to die one day (sorry for bringing that up again).

With some whole life insurance policies you pay your premiums until you die (it becomes a trifle more difficult thereafter), while others let you off once you achieve a certain age – say 65, or, with more demanding companies, 80. Once you do die the policy is termed “paid up”, which has an apt air of finality about it.

Whole life insurance can be arranged with an investment element attached and it is to this slightly more complex (but still pretty easy if you put your mind to it) subject we turn in masterclass 5. This shows how life insurance can be combined with saving and investment, which makes it a bit more than just about dying, and brings in the lively cut and thrust of the stock markets. Excitement squared indeed.

For more details about life insurance, go to the Association of Brtitish Insurers (ABI) on www.abi.org.uk