Whole life insurance is often confused with term insurance, which provides cover for a fixed number of years and then the policy ceases to exist. Should the person die after the fixed term finishes, there is no pay out from the policy, whereas a whole life policy will payout whenever the insured person dies (ie the insured person is covered for the rest of his life).

As payouts will definitely occur for a whole life insurance scheme, premiums can be significantly higher than for a term policy, so you should consider your life insurance needs very carefully.

As life insurance policies often demand continuous monthly payments over a large number of years, you should take considerable care to ensure that you are not paying too much for your life insurance as small differences to monthly premiums can add up to large sums over the duration of the policy.