The difference between term and whole of life insurance is how long the cover lasts and whether it is certain to pay. A term policy covers a chosen number of years and pays nothing if you are still alive when they run out; a whole of life policy runs until a claim, so as long as its premiums are paid, a valid claim will come at some point. That one difference is behind most of the others, including the price.
Which one is worth having depends on what the money is for, and that is something a broker can look at with you. Anyone wanting both types priced for their own age and health can use the form on this page. It is free, and an FCA-authorised broker follows up.
Term and whole of life insurance side by side
Every cell below reports the document named in it: four insurers' own papers, a Legal & General guide and MoneyHelper. Each insurer's wording is its own, not the market's, and the documents come from different channels: Aviva's term summary is the one its direct life insurance page links to, Zurich sells its whole of life policy through financial advisers, Legal & General's whole of life summary is published on its adviser site, and the Royal London booklet covers a policy it took over from Scottish Equitable, not necessarily what it sells today.
| Question | Term life insurance | Whole of life insurance |
|---|---|---|
| How long does cover last? | Aviva's direct Life Insurance Plan summary (May 2023) allows terms of one to 50 years. Legal & General's Life Insurance terms (October 2026) cover you from the start date to the expiry date. | Zurich's Key Features for its adviser-sold policy (February 2025) say cover lasts from the start date until the death, or terminal illness diagnosis, of one or both people insured. |
| Does it pay for certain? | Aviva: it pays on a death, or a terminal illness diagnosis within its definition, that happens during the term, and nothing for either one once the term is over. | Legal & General (June 2026): "whole of life cover provides lifetime coverage, which means your loved ones are guaranteed a payout whenever you die, providing the claim is valid." Its Whole of Life Protection Plan summary (June 2025, from its adviser site) presents it as cover for the rest of the life insured's life, with a lump sum paid on death. |
| Is there a cash value? | Aviva's summary says there is none. | Legal & General's and Zurich's documents say there is none either; see can a policy be cashed in. |
| What happens if you stop paying? | Aviva: miss the payments and the cover stops; nothing already paid is handed back. | Royal London's conditions for the former Scottish Equitable policy (printed May 2025): "If we do not receive your payment within the 30 days, we will cancel your policy. This would mean that we would not pay out if you made a claim." |
| Which tends to cost less? | Legal & General (March 2026): a term policy pays nothing if you outlive it, which is why it tends to be cheaper. | MoneyHelper (archived August 2025): "they’re typically more expensive than shorter-term policies." |
| What is it used for? | Legal & General (June 2026): a term may be chosen to cover the length of a mortgage, or other life milestones such as your children's school years. | MoneyHelper names funeral costs and Inheritance Tax planning as common reasons to buy one. Legal & General's summary adds that the plan can be used to help protect the life insured's family's lifestyle and everyday living expenses. |
Aviva's term policy has no cash-in value, and nor do the Legal & General and Zurich whole of life policies. What you buy in both cases is a payout on death, and the difference is whether the policy is certain to be there when the death happens. The detail of each is on its own page: how term life insurance works and what whole of life insurance is.
Which costs less, term or whole of life?
Term cover usually costs less. The reason is the one in the table: a term policy may never pay, while a whole of life policy is expected to. Legal & General's guide to the types of cover (June 2026) puts it this way for whole of life:
The cost of this type of life insurance will reflect the fact the provider will expect to pay out on a valid claim, whenever death may occur.
That explains the direction, not the size. How much more whole of life costs than term depends on the person and the policy, so it takes quotes on your own details to see the gap. On either kind of policy, age, health, smoking and the amount of cover tend to move the quote, and buying younger usually costs less. Zurich says the premium depends on your personal circumstances, for example your age, health, occupation and whether you use tobacco or nicotine replacement products.
The other difference is when payments stop. Legal & General's whole of life summary says premiums carry on for as long as the life insured lives, and that with no fixed term it is unable to say what your premiums will total. A term policy ends on its expiry date, so the premiums stop with it. The flip side for whole of life is that someone who lives longer than they expected may pay in more than the policy pays out.
A real figure needs your details and a real quote. Whole of life premiums by age are covered in what whole of life insurance costs, and term in what life insurance costs. Asking for both quotes in one go is a normal thing to do, and a broker introduced through this page's form can put the same details to several insurers and explain the gap for your case.
Is whole of life insurance worth having, and when do people choose it?
Whether either policy is worth having depends on what you need it for. The uses in the table point one way for whole of life: a funeral, an inheritance tax bill, a family's living costs. Legal & General's summary says its plan can "help fund any Inheritance Tax (IHT) liability that may be payable on their death". The common thread is a need that will exist whenever you die, which a term policy cannot be sure of covering.
The term uses point the other way, to a need with an end date, such as a mortgage or the years until children finish school. If that is the need, cover that ends with it is what the policy is designed to be.
The trade-offs the documents show
- Certainty against cost. Whole of life pays on a valid claim whenever death comes, as long as premiums are paid; term usually costs less because it may never pay.
- Premiums for life. Whole of life premiums run until death. If you stop paying them, the Key Features for Zurich's adviser-sold policy say the cover ends and no premiums already paid are refunded.
- A fixed end for term. A term policy can expire while the need continues. Aviva says it will not pay for a death, or a terminal illness diagnosis, outside the policy term.
- One payout either way. Both pay a lump sum once and then end: Aviva's summary says a policy will pay out only once, and Legal & General's whole of life summary says "Once the lump sum has been paid the policy will end".
Whether the first of these outweighs the cost is a personal question about your estate, your dependants and what you can afford for decades. A broker can talk it through if you request an introduction in the form on this page, but we cannot say which suits you. Term cover has its own list of strengths and limits in term life insurance pros and cons, and if you are weighing a plan for people over 50, see life insurance over 50.
Tax, trusts and who receives the payout
On tax the two kinds of policy are described in much the same way: Aviva's term summary and Legal & General's whole of life summary put the payout outside income tax and capital gains tax (Aviva says it currently is; Legal & General says it should be), and both tie the inheritance tax position to whether the policy is written under a suitable trust. The detail is in whether a payout is taxable.
The difference is timing. A term policy may have expired by the time an estate faces an inheritance tax bill; a whole of life policy, by design, has not, which is why inheritance tax planning is among its uses. How that works, including joint policies bought for the purpose, is in whole of life insurance and inheritance tax. Tax rules can change, and this is a description of the general position rather than tax advice.
Who is paid depends on how the policy is held, not on the type. Aviva's term summary lists "Your estate" for a policy covering you, "The surviving policyholder" for a joint one and "The trustees" under trust. Royal London's conditions for the former Scottish Equitable whole of life policy give "Trustees or their absolute assignees" for a single life policy in trust and "Executor, administrator, absolute assignees" for one without a trust. Trusts are explained in life insurance trusts.
Can you hold both, or change from term to whole of life?
Whether you can hold a term policy and a whole of life policy at once is a question for the insurer or a broker. Legal & General's whole of life summary anticipates that some applicants already hold cover with it: "If the life insured is covered by another policy with us they will not be eligible for Accidental Death Benefit", the accidental death cover it includes while it assesses an application.
Moving from term to whole of life is a different matter. Ask whether the term policy you are offered can be converted; converting term life insurance to permanent cover sets out what to ask about. If you are comparing named whole of life policies rather than the two types, which whole of life insurance is the best sets out how to do that, and the full list of policy types is in our guide to types of policy.
Frequently asked questions
Is term or whole of life insurance better?
Neither is better in general; they do different jobs, one for a need with an end date and one for a need that lasts. Which job you have is the question to settle first, and term life insurance pros and cons sets out the term side in more detail.
Is whole of life cover the same as life assurance?
Often, as a label: Legal & General says life assurance is usually the name for whole of life cover, while calling its definitions "a rule of thumb". The names overlap in practice, so check what a policy actually does; life insurance and life assurance covers the terms.
Do both types pay out for a terminal illness?
Often, on the insurer's own definition: Aviva's and Legal & General's term policies, Zurich's whole of life policy and the Royal London booklet each include it, and the Royal London booklet requires an illness expected to lead to death within 12 months. For any other plan, including Legal & General's whole of life plan, ask whether it pays on terminal illness; see terminal illness benefit.
Prefer to see both priced for your circumstances? Put your details into the form on this page. The FCA-authorised broker who picks them up can quote term and whole of life side by side, without charge or commitment.
Sources
- Aviva, Life Insurance Plan Policy Summary (DA03008, May 2023; linked from Aviva's direct life insurance page), read 18 October 2026. static.aviva.io
- Legal & General, Life Insurance Policy Terms and Conditions (October 2026), read 18 October 2026. legalandgeneral.com
- Legal & General, Types of life insurance (19 June 2026), read 18 October 2026. legalandgeneral.com
- Legal & General, Life assurance vs. life insurance (3 March 2026), read 18 October 2026. legalandgeneral.com
- Legal & General, Whole of Life Protection Plan Policy Summary (LG2588, June 2025; published on Legal & General's adviser site), read 18 October 2026. legalandgeneral.com
- Zurich, Zurich Whole of Life Key Features (PW720505007, February 2025; sold through financial advisers), read 18 October 2026. zurichintermediary.co.uk
- Royal London, Whole of Life policy conditions (for the policy taken over from Scottish Equitable; printed May 2025), read 18 October 2026. royallondon.com
- MoneyHelper, What is life insurance? (archived August 2025), read 18 October 2026. web.archive.org