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Whole life insurance, cover that does not expire

Whole life insurance gives your family a payout whenever you pass away, as long as you keep up with the premiums (MoneyHelper ↗).

Because the insurer expects to pay, it costs more than cover for a fixed term.

This guide explains how it works, what to watch and why it turns up in Inheritance Tax planning.

Every claim here is our summary of a named external source, linked beside it. Sources change: check the wording at the link before you rely on it.

How it works ↓Inheritance Tax →
01 · The basics

What is whole life insurance?

Whole life insurance, or whole of life cover, has no end date.

MoneyHelper describes it as one of the two main types of life insurance, alongside term cover, and says it pays out whenever you pass away, as long as you keep up with your premium payments (MoneyHelper ↗).

Over 50s plans are one form of it.

Legal & General calls its Over 50 Life Insurance a type of whole of life cover (Legal & General ↗).

01

Start

You take out the policy

You choose the cover and pay a premium, usually monthly.

02

Keep paying

The cover lasts for life

There is no end date, as long as the premiums are kept up.

03

Payout

It pays your beneficiaries

When a claim is made: to your beneficiaries, your estate, or trustees if the policy is written in trust.

02 · Premiums

How whole life insurance works

The premium is the thing to read closely.

MoneyHelper says premiums can be cheaper if you start young and in good health, but that they are reviewed every five or ten years and can rise and become unaffordable (MoneyHelper ↗).

Some plans fix the premium instead: Legal & General says the premium on its Over 50s plan never goes up, and you stop paying at 90 while the cover continues (Legal & General ↗).

Whether a policy has a cash value varies.

HMRC's trust registration manual gives the example of a whole of life policy that can be surrendered for cash (HMRC TRSM23030 ↗), while Legal & General's Over 50s plan has no cash value unless a valid claim is made (Legal & General ↗).

As MoneyHelper describes

Reviewable premium

L&G Over 50s, for example

Fixed premium

Premium
Reviewed every five or ten years; can rise (MoneyHelper ↗)
Never goes up (Legal & General ↗)
Cover
Set by the policy
Fixed cash sum; inflation reduces its buying power (Legal & General ↗)
Stop paying
Read the policy terms
Plan cancelled, nothing back (Legal & General ↗)
Check
When reviews happen and how rises are set
Whether total premiums could exceed the payout
Swipe to compare
03 · Other types

Whole life insurance vs other types

Term cover runs for a fixed period, such as five, ten or 25 years, and pays out only if you pass away within it (MoneyHelper ↗).

Whole of life cover is typically more expensive (MoneyHelper ↗), because a claim is expected sooner or later.

Term life insurance →Over 50s life insurance →

For life

Whole of life

A fixed period

Term

Pays out
At any point in your life, if premiums are kept up (MoneyHelper ↗)
Only if you pass away within the term (MoneyHelper ↗)
Cost
Typically more expensive (MoneyHelper ↗)
Level term: the most simple and affordable option (MoneyHelper ↗)
Often used for
Inheritance Tax planning (MoneyHelper ↗)
Dependants and a repayment mortgage (MoneyHelper ↗)
The risk
Paying in more than you get out (MoneyHelper ↗)
No payout once the term ends
Swipe to compare
04 · The price

Cost of whole life insurance in the UK

We publish no prices.

The premium depends on your age, health, lifestyle, whether you smoke, your family medical history and the level of cover (MoneyHelper ↗).

Because the policy runs for life, the question to ask of any quote is how long it would take for your premiums to add up to the payout.

MoneyHelper warns that if you live longer than you expected, you could pay in more than you get out (MoneyHelper ↗).

Type the figures from a quote into the box.

It starts with Legal & General's own published example for a 60 year old on its Over 50s plan.

The premiums paid would equal the cash sum after 20 years and 2 months.

The fixed cash sum£6,046
Premiums paid after 10 years£3,000
Premiums paid after 20 years£6,000
Arithmetic on the two figures above only: no interest, inflation or life expectancy. The payout is fixed, so inflation reduces what it buys. Nothing you type is stored or sent. Starting figures: Legal & General's published example, £25 a month for a 60 year old non-smoker, from quotes taken on 8 June 2026 (Legal & General ↗).
05 · Inheritance Tax

Is whole life insurance right for you?

MoneyHelper says whole of life policies are often used for Inheritance Tax planning (MoneyHelper ↗).

It says life insurance can help your beneficiaries pay Inheritance Tax without selling your home or other assets (MoneyHelper ↗).

How the policy is held matters, and the table sets out both ways.

MoneyHelper says that with the policy written in trust, its value is not considered part of your estate and can be paid outside probate and Inheritance Tax (MoneyHelper ↗).

Life insurance in trust →Trusts and inheritance tax →

You are the life assured

Not in trust

Trustees own the policy

Written in trust

Estate
The proceeds form part of your estate (HMRC IHTM20012 ↗)
Not part of your estate (Aviva ↗)
Inheritance Tax
Counts towards the £325,000 threshold; 40% standard rate above it (GOV.UK ↗)
Does not count towards the threshold (Aviva ↗)
Paying out
Paid into the estate, which could take a long time (MoneyHelper ↗)
Can be paid outside probate (MoneyHelper ↗)
Charges
—
Certain trust charges can arise if money stays in trust for a long time (Legal & General ↗)
Swipe to compare

The rules only. We do not work out anyone's Inheritance Tax: reliefs, gifts and the home allowance change the answer, so check GOV.UK or a solicitor or adviser for your own estate.

06 · For business owners

Run a business? There is a business version

For key person cover, the tax rules point to term cover.

HMRC treats premiums on whole life policies as capital expenditure that is not deductible (HMRC ↗), and allows key person premiums only on term insurance with no other benefits (HMRC ↗).

This site is mainly about cover a company buys, and the cards show who each policy pays.

Key person vs relevant life →
07 · Sources

Check it for yourself

Every claim on this page is our summary of one of the documents listed here.

We last checked them against the live sources on 28 September 2026.

The documents are the authority, not this page.

Insurers and HMRC update them, so validate any figure or condition at its link before you rely on it.

Questions

Whole life insurance, answered

Whole life insurance, also called whole of life insurance, covers you for the rest of your life rather than a fixed term.

MoneyHelper says it pays out whenever you pass away, as long as you keep up with your premium payments. MoneyHelper ↗

We publish no prices.

MoneyHelper says whole of life policies are typically more expensive than shorter-term policies, that premiums can be cheaper if you start young and in good health, and that they are reviewed every five or ten years and can rise.

Your age, health, smoking, the cover amount and the insurer all affect the price. MoneyHelper ↗

It depends what it is for.

MoneyHelper says whole of life policies are often used for Inheritance Tax planning, but warns that if you live longer than expected you could pay in more than you get out.

Compare it with term cover and, for Inheritance Tax, speak to a regulated adviser. MoneyHelper ↗

Some policies do and some do not.

HMRC’s trust registration manual gives the example of a whole of life policy that can be surrendered for a cash value during the policyholder’s lifetime.

Legal & General says its Over 50s plan, a type of whole of life cover, has no cash value unless a valid claim is made.

Check the policy’s own documents. HMRC TRSM23030 ↗

It is a common use.

MoneyHelper says life insurance can help your beneficiaries pay Inheritance Tax without selling your home or other assets, and that whole-of-life insurance pays out whenever you pass away, as long as you keep paying premiums.

Written in trust, the policy is not counted as part of your estate. MoneyHelper ↗

Whole of life cover pays out only as long as the premiums are kept up.

For its own Over 50s plan, Legal & General says that if you stop paying premiums when due, the plan is cancelled and you get nothing back.

If cost is the problem, MoneyHelper says to contact your insurer first: insurers must support customers in financial difficulty. MoneyHelper ↗

Beta · information only

Personal cover sorted? See the business side.

If you run a company, the business protection guide sets out what each business policy does and who it pays, from HMRC's manuals and the insurers' own guides.

01Key person, relevant life and shareholder cover

02Who each policy pays, with sources

03No email, no quote, no sales call

Information, not advice

We are not an insurer, broker or regulated adviser, and we do not give quotes or recommend a policy. For regulated advice, use an adviser authorised by the FCA.

Open the business guide →

Takes you to the business protection insurance guide.

Not financial advice. This page is general information. Before buying insurance, the FCA tells consumers to check the firm on its Firm Checker (FCA ↗). For free guidance, see MoneyHelper.