Whole of life assurance is the only type of insurance that really has the right to call itself assurance.

This is because if the premiums are maintained to this plan because it runs for the whole of the life of the life assured meaning they are ASSURED of a payout. In contrast term cover is term insurance and not really term assurance as you are only assured of a pay out if death occurs during the term.

That said Whole of life insurance is life insurance cover that runs for the whole of the life of the person that is insured under the policy.

Owing to the fact that this cover runs on a whole of life basis it is a bit more expensive that the term insurance equivalent.

This is due mainly for the need to provide a fund of money within the plan.

A fund of money is needed in the plan to ensure there is always sufficient money available to cover mortality rate changes. Mortality rates are the rates which indicate the statistical chance of someone dying.

These rates generally stay constant but can change from decade to decade as lifestyles change.

With this in mind life companies try to build up cash values within the plans to ensure they can meet any future costs that are created by these mortality rate changes.

One benefit of the cash value is the plans can become self financing in the future meaning after a life of paying the plan clients may be able to select that the cash value funds the premiums on the plan thereafter. There has to be minimum values in most plans to do this and not all life insurance companies will allow it.