A whole-of-life insurance policy is designed to pay out whenever death occurs, as long as premiums are kept up, and is often used to help cover future Inheritance Tax (IHT) liabilities. Unlike term policies, it doesn't end after a fixed period.
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- IHT planning: When written in a suitable trust, the proceeds can usually be kept outside your taxable estate.
- Immediate Liquidity for Beneficiaries: WOL insurance provides beneficiaries with immediate access to necessary funds, preventing the financial strain that often accompanies settling large IHT bills.
- Long-term cover: A whole-of-life plan is designed to pay out whenever a claim is made, as long as premiums are kept up.
For some individuals, whole-of-life insurance is one way to help meet a future IHT bill. Whether it is suitable depends on individual circumstances.
A whole-of-life insurance policy is designed to pay out whenever death occurs, as long as premiums are kept up, and is often used to help cover future Inheritance Tax (IHT) liabilities. Unlike term policies, it doesn't end after a fixed period.
When written in a suitable trust, the payout can fall outside the taxable estate, so the proceeds may not be subject to UK IHT (currently 40% above the available allowances). The outcome depends on the trust, residence and the rules at the time.
Educational information only – not advice. Whole of Life cover involves ongoing premiums that may rise; any payout depends on the policy terms and premiums being kept up, and IHT treatment depends on the trust, residence and rules at the time. Any advice is given only by Neba Private Clients after a full fact-find.
Educational only, not advice. James Spence is a Partner, Family Office and Private Client Adviser, with Neba Private Clients. This website is published for general educational information only. Nothing on it is an advertisement, an offer, a recommendation or personal financial, tax or legal advice, and it should not be relied on as such. Tax rules depend on individual circumstances and may change. The value of investments can fall as well as rise. Case studies are hypothetical or anonymised composites and do not describe real clients or predict outcomes. Advice is only given after a full fact-find, under a signed client agreement with Neba Private Clients. Not directed at persons in any jurisdiction where its publication would be unlawful, including the United Kingdom.
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