The Flexible Whole of Life Plan

A Flexible Whole of Life Policy, as the name suggests, provides life cover for the remainder of your lifetime. Premiums purchase units in an investment fund and the cost of the life cover is then paid for by cancelling the appropriate number of units.

The Flexible Whole of Life Plan

How much will I pay?

The premium is determined by such factors as your age, sex and general state of health. If the premiums are discontinued the cover will lapse.

Cover is available in three forms:

Maximum Cover - The premium is calculated on the basis whereby approximately the same number of units is purchased each month in order to fund the required cover. This means that the investment element remains very low and it is extremely likely that at the policy review time the premiums will increase, and later in life the increases could be substantial.

Balanced Cover - Under this option the premium is higher in order to purchase more units than are actually needed. This therefore builds up a reserve fund to counteract the potential increase in premiums at future plan reviews with the aim of maintaining the same level of premium throughout the contract.

Minimum Cover - this plan provides the minimum level of life cover possible for a given premium, meaning that a much larger proportion is invested. This is very much more a regular savings investment with a small level of life cover added.

Plan reviews

The sum assured and premium are generally guaranteed for the first 10 years at which point the first review will take place. Subsequent reviews will usually be carried out every 5 years until age 70 when the reviews will be annually. Refer to your individual Key Features Document and Personal recommendation.

Joint or single life

The policy can be written on a single life basis, or joint life basis. Where written on a joint life basis the sum assured is payable on either the first or second death, depending on your choice at outset. The latter is the norm for when this type of plan is used for Inheritance Tax planning purposes.

What will I receive back?

There is an investment element to this type of policy so a capital sum may be paid if the policy is surrendered. The sum assured would be paid on the death of the first or second life, depending on how the plan has been written i.e. first or second death.

Waiver of Premium

This option ensures that the insurance company will meet your premiums, should you be unable to work due to an accident or illness for a continuous period of more than 6 months. In addition, waiver may apply if you are unable to carry out certain daily functions i.e. washing, cooking, mobility. The waiver will continue until you are well enough to return to work, attain age 60, or in the event of death, whichever is sooner. Not all policies offer this facility.

Critical Illness

It is possible to include critical illness cover, which will provide a lump sum benefit if you are diagnosed with one of a specified list of illnesses such as heart attack or cancer, and survive a further 28 days. Full details of Critical Illnesses covered can be found in the Key Features Document.

If critical illness is included the sum assured will be payable only on the first of either death or diagnosis.


This type of plan can be written under Trust to ensure the sum assured is paid to your selected beneficiary outside of your estate. This is often used to mitigate inheritance tax liability. If the plan is to be used for this purpose it is important that you can demonstrate to the Capital Taxes Office that the premiums were paid out of excess income; otherwise they can deem that the premiums were gifts and the proceeds of the plan may be considered liable to Inheritance Tax.

Pension advice