Buying Life Insurance? One Tip To Save You Thousands!

It’s simple, always have your Life Insurance policy “Written in
Trust” This may sound technical but it is easy to understand
and it’s so easy to organise
“Written in Trust” ensures that in the event of a claim, the
policy will pay directly to the beneficiaries you name on the
policy when you first take it out If you do not do this, the
policy will payout to your legal estate and this inevitably
means that the money stays in your solicitor’s hands for some
time
Yes, that implies legal delays and, of course, your solicitor
takes a small cut!
Then, if the value of your taxable estate exceeds £275,000, and
remember your home can easily account for the lion’s share of
the £275,000 limit without much difficulty, your estate will
have to pay Inheritance Tax This represents 40% of the estate’s
taxable value in excess of £275,000 So, if your estate has to
pay Inheritance Tax and the proceeds of your life policy go to
your estate, the taxman gets his hands on 40% of your life
policy!
But it’s so easy to avoid all these problems
Simply get your policy “Written in Trust” Then the life
insurance company pays out immediately, directly, and totally
tax-free, to the persons you have named on your policy All you
have to do is tell the online brokerage organising your policy
that you want your policy “Written in Trust” and they will
automatically sort it out for you
This advice remains sound even if the policy is designed to pay
off your mortgage Rather than your estate using the insurance
payout to pay off your mortgage, the policy can be written in
trust and paid to your partner and then he or she can use that
money to pay of the mortgage The benefit? Well if your taxable
estate exceeds the IHT threshold the mortgage is effectively
paid off tax-free
The extra good news is that all the brokers we’ve met will
arrange for your policy to be “Written in Trust” as a free of
charge service So it’s a win win situation and there aren’t
many of those around these days!

Tags | beneficiaries, benefit, estate, inheritance, insurance, life, lion, money, payout, policy, proceeds, solicitor, tax, taxable, taxman