Summary
Far too few people get their life insurance policy "Written in Trust". This article explains the overwhelming advantages
Life Insurance. Should your policy be written in trust?
By Michael Challiner 23/03/06
According to one of the largest UK life insurance companies, just 1% of life policies are written in trust. That is disgraceful and reflects poorly on the financial industry.
Let's explain.
If your life insurance policy is "Written in Trust" then, in the event of a claim, the insurance company pays out directly to the beneficiaries you name on the policy. The significance of this is easily missed.
It means that if the policy is "Written in Trust", the proceeds from the policy never form part of your legal estate and are not subject to Inheritance Tax. The importance of this is illustrated by the following figures:
Take Mr A. He's a widower and wants to leave everything equally to his two sons. He owns his home which is currently worth £245,000 with a £10,000 outstanding mortgage. His investments are valued at £52,000 and his car and other chattels are worth £18,000. He also owns a life insurance policy for £100,000 which is not written in trust. We assume that the costs of administering his estate and obtaining probate would be £5,000.
Warning: fsockopen(): unable to connect to www.web-publishing-house.co.uk:80 in /home/l/i/life/public_html/rssclient/Snoopy.class.php on line 1149
Error: RSS file not found...