Whole of life insurance calculator

The calculator estimates the Inheritance Tax your estate would pay, the figure many people use to set the amount of a whole of life policy written in trust. It takes the tax-free bands off the value of your estate and charges the standard rate of 40% on the rest.

It uses the bands for the 2026 to 2027 tax year: a nil rate band of £325,000 and a residence nil rate band of £175,000. The residence band only applies to a home, or a share of one, left to direct descendants such as children and grandchildren, and it is the lower of the home’s value and the maximum band. The home’s value is its open market value less any mortgage. For an estate worth more than £2 million, the residence band reduces by £1 for every £2 above that.

Choose “married, civil partner or widowed” and the calculator adds a full second set of bands. A spouse’s or civil partner’s unused bands pass to the survivor’s estate, up to 100% of each, so the bands can reach £1,000,000 in all. It assumes the first partner left everything to the other, which is normally free of Inheritance Tax, and used none of their bands. Unmarried couples can’t transfer bands to each other, so each should use “single or unmarried” with their own estate.

It leaves out gifts made in the 7 years before death, which count against the nil rate band but not the residence band, the reduced 36% rate for estates that leave 10% or more to charity, downsizing and reliefs such as Business Relief. Everything is worked out in your browser. The figures you enter aren’t sent to us or saved.

There’s no typical price. Aviva, for example, sets Whole of Life Insurance+ premiums by the cover amount, your age, job, health, lifestyle and whether you smoke, and whole of life policies are typically more expensive than shorter-term ones. The FCA found that underwritten whole of life premiums are the highest of the main protection products, because the payout is typically larger and more likely to be paid.

Only a few of the insurers we review publish whole of life prices on their own sites. These are the figures they give. They aren’t quotes, and we don’t estimate prices for other ages or amounts.

A minimum premium is the least the insurer accepts each month, not the price of a set amount of cover. Aviva’s level Whole of Life Insurance+ cover, for example, starts at £30,000.

Guaranteed over 50s plans are a type of whole of life plan with no medical or health questions, and their providers publish more examples. The cover amounts are far smaller, and the payout is often put towards funeral costs.

Figures from each insurer’s own site or documents, checked on the dates in the Sources list. Insurers are in alphabetical order. The over 50 life insurance calculator has more published over 50s examples, at other ages too.

Inheritance Tax has to be paid by the end of the sixth month after the death, and a payment towards it usually has to be made before probate is granted. MoneyHelper says a policy in trust can speed up a claim and cover a potential Inheritance Tax bill without adding to it. Legal & General says a policy in trust could pay out within a couple of weeks of the death certificate being issued.

Paying the premiums on a policy held in trust for someone else can count as a gift, but regular gifts from your income that leave you enough to live on are exempt as normal expenditure out of income. In an HMRC example, monthly premiums on a life policy written in trust are exempt as a pattern of giving. A trust that holds only a life policy paying out on death, whole of life or term, is excluded from HMRC’s Trust Registration Service while the person insured is alive, and for two years after the death while the trustees pay out the money.

Our guide to life insurance in trust explains the types of trust and how to set one up.

Check how the premium can change before you compare prices. With guaranteed premiums the price stays the same unless you change the cover: Aviva and Zurich guarantee theirs on this basis. Royal London’s Pegasus plan lets you choose guaranteed or reviewable premiums.

Reviewable premiums are looked at again during the policy. On the Pegasus plan they are fixed for 10 years, then reviewed and every five years after, and there is no limit to how much they can rise. MoneyHelper warns that reviewed premiums can rise to the point of being unaffordable.

Some premiums rise on a set pattern. Vitality’s Premium Step option goes up by 2.5% on each plan anniversary, and Smart Insurance’s Age Based policy is recalculated every year as you get older.

Whole of life premiums are often paid for the rest of your life, as on Legal & General’s plan, so the total adds up. Legal & General’s own example: £50 a month for 30 years comes to £18,000. If you live longer than expected, you could pay in more than the policy pays out.