Back to basics: life insurance key part of financial planning
By Kirsten Hastings, 1 Sep 17
IHT planning, nil rate bands and replacing pension scheme death benefits are some of the reasons life insurance needs to remain a core part of financial planning, according to Chris Lean, a chartered financial planner with Aisa International. Click through the slides below to see six key reasons advisers need to speak to clients about ensuring they are protected.
IHT will not be payable until the death of the second spouse for UK domiciled individuals who are married and with an estate over the nil rate band (NRB)* of £325,000 ($419,370, €352,9110).
While there are a number of IHT tax planning exercises that can be undertaken to reduce this liability, sometimes the only thing that can be done is to mitigate the effects of IHT and arrange for funds to pay the estimated tax bill when it arrives.
This can be arranged effectively with a joint life second death life policy written into trust. The funds will be immediately available upon the second death, without probate delay. This allows the executors to pay the IHT, obtain probate and distribute the estate intact.
*NB: Those married to non-UK domiciled individuals are affected by differing IHT rules and a cap on exempt transfers.