Whole of Life Insurance

Whole of life insurance provides guaranteed coverage from the date of acceptance until death, regardless of age. It is also called permanent life insurance.

Unlike term cover, it is non-cancellable and guaranteed renewable, so coverage continues regardless of health deterioration.

How premiums work

Whole of life policies feature level premiums that remain constant throughout your lifetime, calculated to keep the policy funded indefinitely. This structure has two consequences:

• Higher initial cost than equivalent term cover, often 5 to 10 times the price
• Potentially more economical in later years when term premiums escalate sharply

Common uses in Australia

Whole of life cover is less common than term insurance, but serves specific purposes:

• Guaranteed funeral cost coverage for older Australians
• Estate planning, especially for tax-efficient wealth transfer
• Leaving charitable legacies
• Providing for dependants with special needs who require lifelong financial support

Some policies include a savings component that builds cash value over time, though pure protection policies are more common in Australia.

Regulation and ownership

APRA-regulated insurers must hold substantial reserves for whole of life policies, ensuring claim payments are guaranteed.

Coverage typically cannot be purchased through superannuation and must be held personally.