Consumers in the UK looking to take out life insurance are more likely to choose term insurance as opposed to whole of life insurance, it has been revealed.
According to independent financial advisor Life Direct, in spite of this trend, there are pros and cons to both options which depend on the circumstances of the purchaser.
Steve Wroe, for Life Direct, says “Until recently many life insurance premiums were only guaranteed for the first ten years and could increase when the time came to renew them. Whole life insurance is more expensive in the short-term but the availability of fixed life premiums means they could prove a cheaper option in the long-run. There are pros and cons to both options.
"There's no point in taking out a term policy to cover an inheritance tax problem because you don't know when you're going to die. But there's no point in insuring yourself for a whole of life policy for hundreds of thousands of pounds if it's just intended to cover your children whilst they are growing up. Life insurance is just about peace of mind and the trouble with a term policy is that one day that policy is going to stop working for you. Older people tend to opt for whole of life policies for various reasons. Younger people tend to choose term policies while their family is growing up or for a mortgage term “