Ensuring a bright future for Whole of Life
12th August, 2015
Permanent life insurance typically falls into two categories: fully underwritten policies called whole of life (WOL) and over 50s plans. Both can be used to cover funeral costs and contribute towards initial expenses. However the latter, is treated as a guaranteed acceptance plan and therefore does not necessarily take into account good health and non-smoker discounts.
The two types of policy are so different that even the Financial Conduct Authority treats them as different categories in their guidelines. Despite these differences however, the two forms are equally popular, currently accounting for a market worth of roughly £108m, split equally between them.
As demand for Whole of Life cover is expected to grow within the next few years, there are some that wish to see a renewed move away from a “high premium, low pay-out” over 50s market that is currently polarised from the fully underwritten Whole of Life policies. With house prices continuing to rise, retirement age increasing and adult children living at home longer, over 50s are finding their financial needs changing in today’s market. This has meant that for many Life Insurance plans are being put on hold to cover mortgage payments that are extending well into retirement.
Providers like Vitality recognise the need to improve whole of life propositions to deliver better value and more relevant cover for their customers. They state that: “You may not think you need as much life insurance once you’ve retired or paid off your mortgage. But the need for cover doesn’t necessarily end entirely.” By offering extras such as Vitality Optimiser, they recognise that by providing customers incentives, discounts and rewards for looking after yourself customers can get more from their policy than a simple pay-out when they pass away.
To find out more about what providers like Vitality can offer, have a look at our quotes page.