Whole of life (endowment)

Whole-of-life or endowment policies were once the flavour of the month, but no more. The policy has an investment component but most independent studies show you will earn a higher return by taking out a cheaper term policy and investing the difference in another asset.

The premiums you pay are determined by your age when you take out the policy. Basically you pay the same premium either until you die or when the policy matures – usually at age 60 or 65. If you die before you reach this age, the policy pays out an agreed amount. If you're still alive when the policy matures, you receive a lump sum from the investment portion.