Whole-of-life insurance

A type of life insurance policy which lasts throughout the policyholder’s life is guaranteed to pay out when they die if all conditions are met. The policyholder makes a set monthly payment regardless of any changes in health conditions, which is invested by the insurer, usually in fixed income securities. Over time, the policyholder builds up a savings pot which they can borrow money and repay at a later date or use as collateral. The individual can also choose to cash in their policy at any time. However, the whole-of-life policy is still active when they die, their beneficiaries will receive a fixed lump sum and the balance of the savings part.

This definition is for general information purposes only