Is putting your life insurance in trust a good idea?

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Is putting your life insurance in trust a good idea?

Discover why you should consider writing your life insurance policy in trust. We reveal the major advantages that many people are unaware of.

According to the consumer financial advice website, This is Money, only one in ten life insurance policies are written in trust.*

This suggests that many people aren’t familiar with how a trust works, and they therefore run the risk of losing out on the multiple benefits a trust provides.

Not only that, they unknowingly leave their families exposed to potential stress and hassle when the time comes for the life insurance to pay out.

What is a trust?

A trust, in simple terms, is a legal arrangement that ensures the proceeds from your life insurance plan are paid out exactly the way you intend them to be.

It’s a smart – and usually free – way of ensuring you have control over how your policy pays out when you die.

Advantages of writing your life insurance policy in trust

A trust makes it easier for your family to benefit from the lump sum paid out by a life insurance policy where they are the beneficiaries.

Usually a life cover payout rolls into your estate, which can increase its value, and therefore risk pushing it above the inheritance tax threshold which is £325,000**.

A trust prevents the life insurance payout from being included as part of your estate. Therefore it not only helps to protect your beneficiaries from inheritance tax, it also:

  • Cuts out legal delays by avoiding probate
  • Is free to set up
  • Involves minimal paperwork
  • Gives your family and beneficiaries faster access to financial security

Get more information about life insurance today

We can help you find the best deal on your life insurance as we search from a leading panel of providers.

Call us today on 01454 857 935 to find out more.
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