'Whole of life' policies

The only other common type of life assurance is known as a 'whole of life' policy, which does contain an investment element.

Whole of life insurance provides you with life insurance cover for the whole of your life. The sum insured is paid to your dependants following your death.

Whole of life insurance is more expensive, because of the (regrettable) certainty that the life company will eventually have to pay the sum insured.

Monthly premiums are invested by the insurer into a life fund. The premiums and the sum insured are guaranteed not to increase for the first 10 years. After this initial period the plan is reviewed and, if necessary, the premiums may be increased.

If youíre interested in this type of cover, itís best to see a specialised insurance broker or an independent financial adviser, as the investment element varies from insurer to insurer and some are more generous payers than others.