Life Insurance

[Oxide™]

Having woken up this morning at 3am with the need to take a slash, I then had trouble trying to fall back asleep and my mind wondered over things such as OCuK (as you do) and this thread, and it occurred to me that I forgot to add some interesting bits in my post.

That being of inheritance tax and writing your policy in trust. My facts may be a bit hazy so please get professional advice but I recall that the inheritance tax threshold starts at £315k allowance before the government then taxes you for 40% beyond this - this is not on!

To get around this, write your policy 'In Trust' and all your money goes to the beneficiaries without being penalised inheritance tax if beyond the £315k threshold.

Another big benefit of writing in trust is that your money goes to the beneficiaries far quicker than if not in trust - it avoids being intestate/in limbo, so your family get any payout during the grievance period rather than months after your death and them having to also have the burden of paying funeral arrangements etc.

That is at least my understanding so please go research further, I hope it encourages someone to do so

 

[suf1234]

if you looking for life insurance, compare it, to get the best deals. Try www.theycompare.co.uk

 

[tres]

I know someone with a £250million life insurance. Absolutely no word of a lie!

 

[Django x2]

It's far more relevant if you have family. Otherwise there is no point. Any debts you have die with you. Also, don't get stung with Life Cover, Critircal Illness and income protection. CI and IP are almost one and the same, just one pays out as a lump sum and the other gives you monthly payments.

 

[Sash]

Having woken up this morning at 3am with the need to take a slash, I then had trouble trying to fall back asleep and my mind wondered over things such as OCuK (as you do) and this thread, and it occurred to me that I forgot to add some interesting bits in my post.

That being of inheritance tax and writing your policy in trust. My facts may be a bit hazy so please get professional advice but I recall that the inheritance tax threshold starts at £315k allowance before the government then taxes you for 40% beyond this - this is not on!

To get around this, write your policy 'In Trust' and all your money goes to the beneficiaries without being penalised inheritance tax if beyond the £315k threshold.

Another big benefit of writing in trust is that your money goes to the beneficiaries far quicker than if not in trust - it avoids being intestate/in limbo, so your family get any payout during the grievance period rather than months after your death and them having to also have the burden of paying funeral arrangements etc.

That is at least my understanding so please go research further, I hope it encourages someone to do so

Pretty much. A life policy is pointless if you dont do the other work, (Whole of Life for yourself not in trust = insurance on top of your estate, adding to your potential tax liability)

My advice: go see an IFA talk to them about your goals and why you want protection.

I did some advice for one of my friends. She wanted a Whole of Life policy but she was only 25. I didnt see the point in making her pay £20 a month for £100k life cover for the whole of life aspect when you can get a 10 year term assurance for about £5 a month.

Your goals just now and assets may be a lot different in 5 or 10 years time (bigger house, bigger mortgage, bigger car, marriage - needing to cover joint debt or assets) so you dont want to spend a lot now when in a few years time you may need to increase the cover by a large amount.

You can see it as if you get the cover now you get it cheaper, but the chances of yourself having the same amount of cover (unless it is to cover a mortgage or debt) in 10 years time is low, as you will want to requote to see if there are any better deals.

It's far more relevant if you have family. Otherwise there is no point. Any debts you have die with you. Also, don't get stung with Life Cover, Critircal Illness and income protection. CI and IP are almost one and the same, just one pays out as a lump sum and the other gives you monthly payments.

Income Protection is used to cover bills and general everyday bills and living costs. It is used to give you money until you can get back into work.

Critical Illness is used to cover larger more fixed assets -> Pay off a mortgage, help install a chairlift or make house renovations if you cannot move around your house as much or whatever, pay medical bills if you need a lot of private work done.

In my opinion you need both. And they are used for different purposes.