Invest on your families behalf with whole life insurance
There are so many different ways of investing your money these days. You can buy shares in the stock market, put your money into an ISA or savings account with the bank, buy government bonds or take the advice of a financial advisor and start investing in hedge funds and other more complicated investment vehicles. Or you could just take out a whole life insurance policy, investing your money with the intention of it being left behind for your family.
Whole life insurance is very different to term life insurance in both cost, and the way it works. When you take out a term life insurance policy you are essentially buying a standard just in case insurance policy. If you die during the term of the policy then money will be left behind for your family, but the majority of people outlive the term and have just paid their premiums for all those years, just in case.
With whole life insurance you are guaranteed a return on your investment, as whole life insurance runs until the day you die, whatever age that is. Whole life insurance also costs a lot more to buy as a result, with premiums being roughly 8 times as much.
It’s been shown that most people investing their money in a whole life insurance policy will eventually leave behind more money than if they’d invested the money in the stock market, an ISA or a standard savings account, because insurance companies invest your money wisely, and charge what they do for a certain level of cover.
If you want to put money aside now, which will not be affected by inheritance tax, then a whole life insurance policy is a fantastic way to do so, and you know that when you do eventually die, then the money you’ve effectively invested, by paying your whole life insurance premiums, will be paid out to your family free of inheritance tax, which is currently 40% over £250,000, and free of any other form of tax as well.