All Products



Name

Description

Advantages

Disadvantages

AIM portfolio RIP – These types of investments are often used towards IHT planning as investments are made into companies which qualify for business property relief. As long as the shares are held for at least two years and are held at death, the investment should be exempt from inheritance tax. Investments quoted on AIM are likely to have higher volatility and liquidity risk. The client needs to understand how the products work and what the underlying investments are.
Annuities RIP - An annuity is a product designed to provide a regular income in exchange for an initial capital payment. Offers secure income for life. Many benefits can be included offering guarantees to spouses and estates. Indexation can help combat inflation. Ties up capital. Depending on timing and interest rates, low income options might only be available.
Annuities (investment linked) RIP. A type of annuity where the annuity payments vary with investment performance of the funds in which the annuity is invested. As with Annuities, gives income for life. Offers the potential for higher income. As this is investment linked, the income levels can drop.
Bank/building society account Other - Bank and Building Society accounts offer a wide range of cash based accounts for investors. The interest rates are tiered according to the size of the balance held in the account. These are normally instant access accounts or restricted access accounts. They are deemed to be of a cautious nature as there is no link to equities. Offers higher levels of security from FSCS and instant access. Often produces growth lower than inflation, thus reducing the real monetary value over the long term.
Business Premises Renovation Allowance (BPRA)Schemes Other - The BPRA is a government initiative to encourage conversion and renovation of empty business properties in designated areas. Tax efficient alternative investment Capital is tied up for the long term.
Contracts for Differences (CFD) Derivative - Contracts for difference (CFDs) are one of the world's fastest-growing trading instruments. A contract for difference creates, as its name suggests, a contract between two parties speculating on the movement of an asset price. The term 'CFD' which stands for 'contract for difference' consists of an agreement (contract) to exchange the difference in value of a particular currency, commodity,share or index between the time at which a contract is opened and the time at which it is closed. The contract payout will amount to the difference in the price of the asset between the time the contract is opened and the time it is closed. If the asset rises in price, the buyer receives cash from the seller, and vice versa. There is no restriction on the entry or exit price of a CFD, no time limit is placed on when this exchange happens and no restriction is placed on buying first or selling first. CFDs are traded on leverage to give traders more trading power, flexibility and opportunities. The investor is liable to CGT but not stamp duty. These are high risk complex products. There is no underlying asset actually held by the investor. The investor is able to gear his investment which can amplify the risk.
Discounted gift trust via a bond A DGT is a type of trust usually set up with an investment bond. It allows the gift of a lump sum into a trust whilst retaining lifelong ‘income’ (i.e. withdrawals from capital). The policy is usually underwritten to provide a discount which reflects how much income may be paid back to the client. However the right to income has no value when the client dies effectively meaning that this amount is out of the estate straight away. The remainder of the investment is placed into trust and is considered to be a potentially exempt transfer or chargeable transfer. A large amount of IHT can be taken away from the estate whilst the client receives an ‘income’. The discounted value is immediately out of the estate. Not very flexible. Once the level of payments has been agreed they cannot be changed. Could still suffer some IHT charges if the client dies within 7 years or longer.
Junior ISAs RIP – Junior ISAs are tax free savings accounts designed for parents to save for their children’s future. The investment is in the child’s name and they have access to the funds at age 18. They are only available to children who are UK resident, do not have a child trust fund and were born before Sept 2002 or after 03.01.11. Each child can hold a cash ISA or stocks and shares ISA. The maximum contribution that can be paid is £3,600. Advantages – easy way for parents and grand parents to save for a child in a tax efficient manner. The child benefits to the length of term of the investment (depending when the first contributions are made) and possibly pound cost averaging. Proceeds are paid tax free. Disadvantages – the tax benefits may change in the future. The accounts are less flexible as the funds are locked until the child is 18.
Employer Funded Retirement Benefits Schemes (EFRBs) Other - An EFRBS is a unapproved pension scheme. This means that it does not share quite the same tax advantages of a conventional occupational pension scheme but the usual contribution limits do not apply. No contribution limits and allows a means to borrow money from the company. The company gets no tax benefits until the benefits are drawn from the scheme in taxable form.
Endowment Savings Plans RIP - An endowment policy is a life insurance contract designed to pay a lump sum after a specified term (on its 'maturity') or on death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies also pay out in the case of critical illness;Policies are typically traditional with-profits or unit linked (including those with unitised with-profits funds);Endowments can be cashed in early (or surrendered) and the holder then receives the surrender value which is determined by the insurance company depending on how long the policy has been running and how much has been paid in to it. Disciplined long term regular savings. Takes advantage of pound cost averaging. Proceeds paid free of CGT, subject to qualifying rules. Offers little flexibility. Not as tax efficient as ISA’s.
EIS (Funds, Managed Portfolio & Shares) Other - Enterprise Investment Schemes are designed to help certain types of small higher-risk unquoted trading companies to raise capital. Investors are provided with a range of tax reliefs for investing in eligible shares in these qualifying companies. There is a risk that these companies may not perform as hoped and in some circumstances they may fail completely. Tax relief and the potential for high levels of performance Illiquid, high risk, potential to lose all capital and complex
Enterprise Zone Property (Unit Trusts & Syndicates) Other - Enterprsie Property Zone investments encourage investment into commercial property within certain areas designated by the Government. Generous tax relief available. Investment is tied up for 7 years. Sophisticated and complex investment
Exchange Traded Commodities (ETC) RIP - Exchange Traded Funds are index tracking funds that are listed and traded on major stock markets around the world in the same way as the share of publicly quoted companies. They are similar to an index-tracking pooled fund, as they reflect the diversification and performance of a chosen index, but they are traded like a single share through stockbrokers and their prices are updated throughout the day. Generally lower expense ratios. Tracks specified market indexes. Can be used within ISA’s. Subject to market fluctuations and tend to experience a degree of tracking error.
Exchange Traded Funds (ETF) RIP. Exchange Traded Funds are index tracking funds that are listed and traded on major stock markets around the world in the same way as the share of publicly quoted companies. They are similar to an index-tracking pooled fund, as they reflect the diversification and performance of a chosen index, but they are traded like a single share through stockbrokers and their prices are updated throughout the day. Generally lower expense ratios. Tracks specified market indexes. Can be used within ISA’s. Subject to market fluctuations and tend to experience a degree of tracking error.
Exchange Traded Notes (ETN) Other - A type of unsecured, unsubordinated debt security that was first issued by Barclays Bank PLC. This type of debt security differs from other types of bonds and notes because ETN returns are based upon the performance of a market index minus applicable fees, no period coupon payments are distributed and no principal protections exists. No tracking errors. Can defer capital gains tax until maturity or or when the ETN is sold. High risk, credit exposure.
Executive pension plans (EPPs) This is a form of money purchase occupational pension scheme. It is aimed at directors and senior management. Maximum tax free cash that can be taken at retirement is 25% of the fund value. Allowed to make loan backs to the employer. Investment into a wide choice of investment areas. Can buy commercial property. Can be expensive to run.
Film Partnerships Other - An investment made into an LLP to provide funding for film projects. The initial investment may be used to purchase a loan which may be repayable by the client in full. Potential for high levels of performance "100% of funds may be lost and the loan may become payable by the client. Possible regulatory risk"
Friendly Society Bonds (regular savings only) RIP -Friendly Society Bonds are tax-efficient regular savings plans over a period between 10 and 15 years. Free of tax on investment income and capital gains within the fund. Limited investment amounts.
FURBS Other - Funded Unapproved Retirement Benefit Schemes have virtually no limit on contributions, and the entire lump sum can be withdrawn at retirement. There are significant downsides, however: as the scheme is unapproved, FURBS contributions are not entitled to any Tax Relief. By definition those investing in FURBS are likely to be higher rate taxpayers, and so this lump sum will probably be taxed at 40%. Allow greater amount of funds to be invested for retirement planning than can be invested through registered pension schemes. The scheme is unapproved. Since Pension simplification, highly unlikely that any new FURBs will now be established.No tax relief on premiums
Futures Derivative - A futures contract is a type of derivative instrument, or financial contract, in which two parties agree to transact a set of financial instruments or physical commodities for future delivery at a particular price. If you buy a futures contract, you are basically agreeing to buy something that a seller has not yet produced for a set price. Potential for large profits Potential for large losses, complex investments.
Single Issue Gilt Holdings Other. A debt issued by the uK Government at a set rate of return for a pre-determined time period Security of pre-determined income level May not offer the highest returns due to the high level of security
Immediate Needs Annuity RIP - An immediate needs annuity policy can be purchased where an elderly relative is already in either residential care or a nursing care home or is about to be admitted. The annuity is paid directly to the care provider for the life of the individual and where HMRC has agreed for this to be paid gross (no tax on the income). Paid directly to the care home free of income tax. Secures the payment of nursing care. Can tie up capital and if set up incorrectly, clients can lose money.
Income/Flexible Drawdown RIP. Income Drawdown (also known as an unsecured pension) allows you to take income from your pension fund while the fund remains invested and continues to benefit from any fund growth. You generally need a substantial fund value to take income drawdown. There is no minimum amount of income that must be drawn. This means that individuals may be able to leave their pension fund untouched for as long as they like, without the necessity of drawing an income. Risk over the pension fund reducing in value due to fund performance, income withdrawals and falling GAD rates.
Investment Bonds RIP - A unit linked single premium whole life assurance policy. Part of the premium gives life cover whilst the balance is invested in unitised funds. Under some circumstances, since the bond is a life policy, certain tax advantages may be enjoyed. For example if the capital and annual interest are reinvested in full, there is no immediate liability to higher rate tax. If the proceeds of the bond are subsequently taken when a former higher rate taxpayer has become a basic rate payer, there is no higher rate tax liability. Tax deferral for higher rate tax payers with immediate tax liability on income as long as this is within the 5% annual limit. Deemed as a medium to long term investment, may be penalised on early encashment and does not allow the investor to utilise capital gains tax allowances.
Investment Trusts RIP - Investment trusts are closed-end funds and are constituted as public limited companies. No restrictions of what the funds invest in. Generally considered to be higher risk than OEIC’s and Unit Trusts.
Investment Trust Savings Schemes RIP - To access holdings in an investent trust through a packaged product rather than holding the trust directly The advantage over a direct holding is that the administration is taken care of by the administration company Unlikely to be able to be held on a pltform
ICVC, OEICS, Unit Trusts RIP - An ICVC is ‘an investment company in which you can buy shares. The ICVC then invests the money from those shares in other companies’. Over the long term, is expected to produce higher returns than deposit based investments. Possibility for capital loss. If not managed, possible rise to income and capital gains tax.
ISAs (stocks and shares) RIP. Stocks & Shares ISA’s are tax efficient wrappers that are used to invest in investment funds. The most tax efficient product available to UK investors, tax efficient growth and tax free income Limited investment amount
ISA (cash) Other - Cash ISA’s are tax efficient deposits for individuals resident and ordinarily resident in the UK. Very tax efficient deposit based savings vehicle. Not equity based. Unable to be held in trust. Limited investment amount
Loan Notes Derivative - A loan note is a legally binding document issued from a lender to a borrower when money is borrowed. Included in the loan note will be details of the loan and the terms and conditions that will be applied. High rate of return than ay be available on deposit or from other types of fixed interest investment Long term investment with high risk and high capacity for loss
Loan trust via a bond A loan trust via a bond is where the client establishes a trust. The client makes a loan to the trust which is then invested usually via a bond. The client can then receive payments back from the loan. Any capital growth on the investment does not form part of the client’s estate. Any of the original investment that has not been paid back to the client prior to their death forms part of their estate as normal. Client has access to original capital sum – it is repayable on demand. The payment can be by regular instalments or as lump sums when required. Growth on the investment is out of the estate. Maybe a layering of costs paying for the trust, the wrapper and the underlying funds. There is still the maximum 5% annual allowance - any more paid back means the client may incur an immediate tax bill. Once the loan has been completely repaid, no more monies can be taken. If the client decides to cancel the loan at any point then this could create a potentially exempt transfer or chargeable lifetime transfer on the balance of the loan.
Low Cost Endowments RIP - A low cost endowment is a combination of an endowment where an estimated future growth rate will meet a target amount and a decreasing life insurance element to ensure that the target amount will be paid out as a minimum if death occurs (or a critical illness is diagnosed if included). Provides life and critical illness for the mortgage amount and proceeds are free from capital gains tax (subject to qualifying rules). May not achieve sufficient growth to repay the mortgage. Infelxible with an opaque charging structure.
Maximum Investment Plans (MIP) RIP - The Maximum Investment Plan is a tax-efficient savings plan which requires regular payments for at least 10 years. Its performance is related to funds of your choice, and it provides a lump sum at the end of the savings term free of any personal liability to tax. You can choose to extend the contract beyond the ten years and take flexible, regular, tax-free income while still investing contributions. The assets in which your contributions are invested are subject to life assurance company taxation and so this will affect the investment growth achieved. Tax efficiency for high rate tax payers Higher rate tax payers will be penalised if funds are held for less than 7.5 years
National Savings Products Other - National Savings and Investments products are government investments that can be purchased easily through post offices, or directly by telephone or post from National Savings & Investments. They are all secure investments as they are guaranteed by the government. Guaranteed growth or income. Often low rates or return. May not be suitable for long term investing due to rate of real return.
Offshore Investment Bonds RIP - An investment bond that is administered outside the UK and therefore benefits from different taxation regulations to those which exist in the UK. Growth on investment can be achieved tax efficiently, meaning generally investments will grow tax-free. Offshore or ‘international’ bonds can go down, as well as up in value, depending on the performance of the chosen investments. Can be used to aid in tax planning in a number of ways. Generally more expensive to run than their onshore equivalents
Offshore Bond RIP - An investment bond that is administered outside the UK and therefore benefits from different taxation regulations to those which exist in the UK. Growth on investment can be achieved tax efficiently, meaning generally investments will grow tax-free. Offshore or ‘international’ bonds can go down, as well as up in value, depending on the performance of the chosen investments. Can be used to aid in tax planning in a number of ways. Generally more expensive to run than their onshore equivalents
Offshore Unit Trusts RIP - A public limited company that co-ordinates the distribution and management of unit trusts amongst countries within the European Union. These funds can be marketed within all countries that are a part of the European Union, provided that the fund and fund managers are registered within the domestic country. Ability to access investments not available through any funds domiciled in the UK regulatory protection may not be as strong as within the UK
Options Derivative - A financial derivative that represents a contract sold by one party (option writer) to another party (option holder). The contract offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security or other financial asset at an agreed-upon price (the strike price) during a certain period of time or on a specific date (exercise date). Can be used to diversify a broad portfolio for a sophiscated investor Complex and high risk investments
Permanent Interest Bearing Shares (PIBs) Securities - Fixed interest (usually 10 to 13 percent) non-redeemable security issued by the major UK building societies and traded on the London Stock Exchange (LSE). PIBS offer a fixed income paid twice a year for ever (in perpetuity). Their capital value (market price) moves in direction opposite to that of market interest rates: if rates go up, PIBS lose value, and vice versa. They are less liquid than gilt edged securities because being non-redeemable, they can be cashed only by finding a buyer. This type of investment may be good for people with a low attitude to risk who desire income. However they also need to accept the risk of how illiquid the investment is. Secure source of regulr income for a low level of risk (dependent on the issuing Building Society) PIBS are not covered by the UK Government's compensation scheme.
Personal Pension RIP - A personal pension is a very tax efficient individual investment vehicle, with the primary purpose of building a capital sum to provide retirement benefits. Both individuals as well as employers can contribute to the scheme. Extremely tax efficient. Can be invested in a wide range of funds and investments tax free cash payment available when funds are crystalised "Illiquid generally only accessible from age 55 onwards taxable income"
Purchased Life Annuities RIP - This is a type of annuity bought with a lump sum of money from personal savings or investments. Part of the annuity is deemed to be interest paid on the capital and is taxed. The other part is considered to be a return of capital and so is not liable to tax. The annuity rates for purchased life annuities and pension annuities differ. Offers secure income, enabling individuals to budget effectively. Once the annuity has been purchased, the capital is lost.
Real Estate Investment Trusts (REIT) RIP - A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate. Allows investment in real estate at a lower level than purchasing a property in it's entirity May be illiquid
QROPS RIP - “QROPS” stands for Qualifying Recognised Overseas Pension Scheme. It is a type of pension fund that most people with a UK pension scheme who are leaving the UK can transfer their pension pot into, without incurring a charge to UK income tax. Enables clients to transfers pension benefits to the country in which they intend to retire and where the tax regime may be less onerous than within the UK pension regime The regulatory regime into which the pension is transferred may not offer the same level of protection as within the UK. However, this may be offset by the fact that HMC keep a list of approved QROPS.
s32 contracts This is where a company pension scheme is transferred to the name of the individual member. Any GMP is increased each year as per the previous scheme rules. Benefits to be provided are similar to the ceding scheme. No additional contributions can be made into the scheme. Can be expensive to run. Where the transfer value includes guaranteed minimum pension (GMP) liability, the transfer can only be accepted when there are sufficient funds to cover the guarantees. The fund may not be able to provide tax free cash if the fund is not enough to cover the guarantees. If GMP exists then benefits must be taken at the same normal retirement age as the final salary scheme. A single s32 plan cannot be used for phased retirement. Death before retirement means widows GMP must be paid out then a lump sum of maximum 4 times salary at date of leaving plus a return of member contributions (plus interest) – balance can be used to provide a pension.
Self Invested Personal Pension (SIPP) RIP - A Self Invested Personal Pension (SIPP) is a type of personal pension plan. It works in the same way for contributions, tax relief and eligibility. However the main difference is that the SIPP has a more flexible approach to investments. A conventional personal pension generally involves the plan holder paying money to an insurance company for investment in an insurance policy. This means the money is invested with relatively little choice or freedom from the plan holder. A SIPP allows the plan holder much greater freedom in what to invest in and for the plan to hold these investments directly. The plan holder can have control over the investment strategy or can appoint a fund manager or stockbroker to manage the investments. For SIPP contracts written under trust, the trustee controls the investment under instruction from the member. It is possible for the plan holder to be the trustee. If this is the case, an approved administrator must be appointed to carry out investment transactions. As for personal pensions but with a wider investment remit. Generally only accessible from age 55 onwards providing a taxable income. This may be a higher risk product due to the wider range of investment opportunities. May have higher charges than a PP or SHP.
Shares Securities - A share is an equity that represents a part ownership of a company. Investors buy shares in a company because they expect to receive income in the form of dividends, and to achieve capital growth. They hope that rising company profits will lead to increasing dividends and/or growth in the value of the shares. Every company issues shares, but for shares to be offered to the general public the company must usually gain a listing on the Stock Exchange. Shares allow investors to target their investment in a particular company and may therefore provide significant returns. Risky as the investment is resting on the fate of one particular company. Whilst gains can be made, the client must be prepared for loss.
Small Self Administered Schemes (SSAS) This is a form of money purchase occupational pension scheme aimed towards directors of firms. Maximum tax free cash that can be taken at retirement is 25% of the fund value. Wide range of investments available such as property. Can make loans to sponsoring employer (subject to special rules). Can borrow money to help fund a property purchase (subject to special rules). Can buy shares in the company (subject to special rules). Can have several members to the scheme. Investments grow free of capital gains tax. Can accept employer contributions. Can be expensive to run. Can be onerous to run. Problems may occur is not all the members are trustees.
Stakeholder Pensions RIP - A stakeholder pension is effectively a low cost personal pension. The only way in which a stakeholder pension differs from a personal pension is that a stakeholder pension scheme is subject to certain minimum standards. These standards cover – Charges, Investment Choice, Minimum contributions, Frequency of investment. Cost effective retirement planning. Restricted funds, so unlikely to suit sophisticated investor.
Stakeholder Pensions RIP - A stakeholder pension is effectively a low cost personal pension. The only way in which a stakeholder pension differs from a personal pension is that a stakeholder pension scheme is subject to certain minimum standards. These standards cover – Charges, Investment Choice, Minimum contributions, Frequency of investment. Cost effective retirement planning. Restricted funds, so unlikely to suit sophisticated investor.
Stakeholder Pensions RIP - A stakeholder pension is effectively a low cost personal pension. The only way in which a stakeholder pension differs from a personal pension is that a stakeholder pension scheme is subject to certain minimum standards. These standards cover – Charges, Investment Choice, Minimum contributions, Frequency of investment. Cost effective retirement planning. Restricted funds, so unlikely to suit sophisticated investor.
Structured Capital at Risk Products (SCARP) RIP - Structured capital-at-risk products (known as SCARPs) aim to return the original money invested at the end of the term unless the index or asset price to which the product is linked has fallen below a predetermined threshold. If this happens you can quickly lose your original money. For this reason, if you decide to invest in fixed term investments / structured products they should form only a small part of a balanced investment portfolio. Potential for high reward, not linked to the stock market Possible to lose all of the capital invested.
Structured Deposits Other - Structured Deposits are investments linked to the performance of identified underlying financial assets. The underlying assets may be currencies, commodities, or rates, among others. Structured Deposits have pre-defined maturity dates when principal plus accrued interest are paid out. Fixed term return of capital protected as long as deposit is left until maturity with a known rate of return. Possibility that there will be no growth. No access to the deposit during the term of the investment without penalty
Structured Products (capital protected) RIP - A structured product aims to provide capital growth or income whilst also offering full or partial protection of the original investment. Structured products should clearly state the risks involved and the potential rewards available assuming a specific set of investment objectives are achieved. Structured products usually have a specific term or period to maturity, eg 5 years, but recently open-ended structured funds have become available. A structured product’s pre-packaged investment strategy can be linked to derivatives based on a single share, a basket of shares, options, indices, commodities, bonds or currencies. Capital protected as long as investment is held until maturity and assuming the specified investment objectives are met. Can be used to help diversify a portfolio. Complex, can be expensive and not transparent in the investment returns or charges.
Traded Endowment Policies (TEP) RIP - Traded endowment policies (TEPs) or second hand endowment policies (SHEPs) are traditional with-profits endowments that have been sold to a new owner part way through their term. The TEP market enables buyers (investors) to buy unwanted endowment policies for more than the surrender value offered by the insurance company. Investors will pay more than the surrender value because the policy has greater value if it is kept in force than if it is terminated early. When a policy is sold, all beneficial rights on the policy are transferred to the new owner. The new owner takes on responsibility for future premium payments and collects the maturity value when the policy matures or the death benefit when the original life assured dies. Policyholders who sell their policies, no longer benefit from the life cover and should consider whether to take out alternative cover. The majority of charges have often been paid by the original policy holder often invested in with-profits funds so bonuses are secure if held to full term As inflexible as indivudally held endowment policies
Trustee Investment Plan RIP - A Trustee Investment Plan (TIP) is an investment vehicle used by Trustees of Registered Occupational Pension Schemes, such as SSAS and Self-Invested Personal Pensions. For example, a TIP may provide access to investments that are not available through the main occupational scheme. wider range of investment opportunities high charging structures, inflexible, lack of transparency.
UCIS RIP - A collective investment scheme which is not recognised or authorised by the FSA. Wide investment remits "Lack of regulatory supervision leading to increased risk. Likely to be banned for retail investors"
Variable Annuities RIP - An annuity linked to the performance of the chosen investmnt fund combined with a guarantee of future minimum fund value or income level Future income may be higher than a convential annuity. Minimum income guarantee possibility for increasing income flexible. Cost of guarantees charges may prohibit switch to alternate provider if fund value has fallen below the guarateed amount.
Venture Capital Trust RIP - VCTs are designed to encourage individuals to invest indirectly in a range of small higher-risk trading companies whose shares and securities are not listed on a recognised stock exchange, by investing through Venture Capital Trusts. Potential for high growth rates and income tax relief @ 30% with the possibility of no CGT liability High risk and illiquid
Warrants Derivative. A warrant is defined as a derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue as a "sweetener" to entice investors. Tending to be high-risk, high-return investment tools that remain largely unexploited in investment strategies, warrants are an attractive option for speculators and hedgers. Transparency is high and warrants offer a viable option for private investors as well. This is because the cost of a warrant is commonly low, and the initial investment needed to command a large amount of equity is actually quite small. Option to buy securities at a discount to the market price The value of the certificate can drop to zero. A holder of a warrant also does not have any voting, shareholding or dividend right.
Whole of Life (investment linked) RIP - Whole of life insurance guarantees the pay-out of a lump sum whenever the policyholder dies, so long as the monthly premiums are maintained. Because death is inevitable, it follows then, that premiums for whole of life cover are more expensive than for the alternative option of ‘term life insurance’. Under whole of life cover, some of the monthly premiums are invested by the insurer into life funds. This means that both the premiums and the sum assured can change. Whole of Life policies are non-qualifying. Effective tool in estate planning. Premiums are not guaranteed. If the funds are performing poorly or mortality rates increase, premiums may rise to cover these issuses.