Life insurance has many different applications and policies specifically designed to deal with a given set of requirements. One such policy type is referred to as whole life insurance.
Your life
For the purposes of insurance, you may wish to consider your life as broadly falling into two divisions once you are financially independent of your parents:
- Those years where you are working and perhaps setting up a family and home – your financial liabilities (e.g. mortgage, children etc) may peak during these years;
- The period when you are hopefully relatively financially stable and your children relatively financially independent.
Insurers have created various forms of life insurance in recognition that people in the two groups may have slightly different sets of requirements for cover.
Term cover
To understand whole life insurance, it is necessary to start with a brief discussion of what’s called term life insurance.
These types of policies cover your life for a specified number of years (the term) and once the term has expired, the insurance policy is null and void.
They are typically used by people in the first category above and may be used to protect a family against the effects of premature death and a loss of income on things such as mortgage, car and furniture repayments etc.
Whole life insurance
This form of life cover is different because it provides open-ended cover until the day you die – whatever age that proves to be (though some policies may have a ceiling age – for example, with some policies it is 95).
It will pay out a lump sum to help those left behind to handle the grief and deal with things such as funeral arrangements etc.
In a sense, this cover is conceptually different because it is covering not a possibility but a certainty – the eventual death of the policyholder. For that reason, in conventional insurance terms this is sometimes called life assurance though this use is declining in modern English.
Other options
In fact, the above outline is a generalisation and some younger people also choose to take out whole life cover.
It’s also possible to look for cheap life quotes covering joint life cover and to combine life cover with things such as critical illness insurance.
Try to remember though that what’s cheap for someone else may not prove to be cheap for you if it fails to service your requirements.
If you’re looking for whole life insurance, it may be more important to have suitable rather than cheap life cover.