Whole of Life Protection Plan – Overview
Pays out a lump sum in the event of death on either single, joint 1st or 2nd death basis. This contract has guaranteed premiums unless Indexation (using RPI) is chosen.
Where a lump sum is required to:
- Cover the expected IHT bill.
- Provide financial support to a partner or dependant.
- Cover the cost of funeral expenses.
Can be paid in instalments of 2, 3, or 5 years. Only available for business cover.
- Cover the loss of a key person.
- Where a benefit is required to purchase the shares owned by a director or partner.
- Where a benefit is required to cover an interest only business loan.
Suitable if customers
- Do not want their cover to have a fixed end date.
- Want the level of cover to remain the same throughout the term of the policy (Unless indexation chosen).
- Want either single, joint 1st or 2nd death basis.
- Need a lump sum in the event of death and have dependants and are not willing to self-insure or do not have funds elsewhere.
- Have potential IHT concerns or business interests.
- Have medical conditions that do not prevent provisions of cover, and who are happy to be medically underwritten.
- Can afford monthly/yearly premiums for Whole of Life Protection Plan and are UK resident.
Unsuitable if customers
- Want to stop paying premiums but still want cover to continue.
- Only need cover for a fixed period.
- Want their premiums and sum assured to decrease over time.
- Want a product to pay a monthly benefit if unable to work for a period of time due to accident or injury (IPB) or customers who want cover for a specific list of illnesses or conditions (CIC) Or Customers who want to receive a monthly benefit in the event of death or earlier Critical Illness (FPIP/CIC).
- Don't need a lump sum on death or without dependents and are willing to self-insure and have sufficient funds elsewhere.
- Require a non-medically underwritten journey due to their state of health or illness.
- Are not UK resident.
Amount of Cover
No minimum sum assured. Driven by minimum premium.
Maximum sum assured -
- £2 million - if Indexation is chosen and the life insured is aged up to 70.
- £1 million - if Indexation is chosen and the life insured is aged 71 to 84.
- £5 million - if life insured is aged up to 69.
- £2 million - if life insured is aged 70 to 79.
- £1 million - if life insured is aged 80 to 84.
The amount of cover remains the same throughout until a claim is made unless Indexation is chosen.
- The minimum age to take out a policy is 18. It is possible for a life of another policy to be taken on a 17 year old by an adult with insurable interest. This policy can then be placed in an Absolute trust with the 17 year old as the beneficiary.
- The maximum age for a buying a policy is 84.
- Payable monthly or annually by Direct Debit or cheque.
- Policy can be assigned or owned by a third party.
- Policy can be sold for Inheritance Tax purposes.