Cost of the Different Types of Whole of Life

MrMicawber_2

Could someone please let me know the relative cost of non profit, with profit and low cost AND why. (I'm assuming low cost is least expensive but would like to be certain).

(By the way I know term insurance is cheaper and suitable for most needs but I need to know a bit about whole of life)

Many thanks.

dunstonh

Could someone please let me know the relative cost of non profit, with profit and low cost AND why. (I'm assuming low cost is least expensive but would like to be certain).

Assuming you mean regular premium whole of life plans for the primary provision of a sum assured....

Its impossible to tell as investment backed whole of life plans will be subject to investment returns. If the investments meet the target growth rate then premiums will stay as they are. If they exceed the target growth rate the investment element will build up quicker. If they fall short then the premiums will have to rise (typically after year 10).

Non investment linked whole of life plans give you more certainty. Reviewable plans can still be increased but guaranteed gives you absolute certainty.

Which option will be best financially is only something you you can tell in hindsight. There are plenty of people that have had 10 years of cheap premiums but are now facing big premium increases (or reduced sum assureds) because the investment target growth rate was set too high. If they died in that 10 year period then financially it was the right choice. If they live another 10 years and pay the higher premiums then almost certainly it was the wrong financial choice.

MrMicawber_2

Dunstonh - many thanks for your reply. I understand the issue of overall investment returns and therefore the effect of this on overall cost. If I turn my question round a bit and say I want to guarantee a sum assured of £100,000 and I want to pay level premiums. All other things being equal (same provider etc) in what rank would the premiums be?