One form of investment-type life insurance that could be worth considering is the maximum protection option of a flexible ‘whole-of-life’ unit-linked policy which, as the name suggests, gives you cover for the whole of your life – provided you keep paying the premiums.
By choosing the maximum protection option, you are guaranteed life cover for the rest of your life, whatever your state of health.
With term insurance – unless you pay extra for a renewable policy – you may not be able to renew your insurance if your health deteriorates.
However, unlike term insurance, your premiums may have to go up (usually after ten years) unless you are prepared to reduce the amount of life cover.
This is because these policies are unit-linked, so the premiums you pay go into an investment fund which is divided up into units which are cashed in to pay for the life insurance.
The value of your policy depends on how the price of these units move, which in turn depends in the underlying value of the investments in the fund.
One of the main uses of this type of life insurance is as a way of providing a lump sum to pay an inheritance tax bill.