Insurance

Insurance

FORTHCOMING CHANGE: In the Budget on 30 October 2024, the Chancellor of the Exchequer, Rachel Reeves, announced that from 6 April 2027, unused pension funds and death benefits will be treated as part of an individual’s estate for inheritance tax purposes. The government is consulting until 22 January 2025 about the mechanism for achieving this measure. This will cover death in service benefits and death benefits payable during retirement but it is not yet clear whether it will cover life assurance benefits provided by an employer.

Life assurance and estate planning

Life assurance can be an important tool in estate planning and there are various types of life assurance policies available:

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a whole life policy—this type of policy will pay out a sum on the death of the life insured, whenever that death occurs, in return for a premium
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a term assurance policy—this type of policy insures a person’s life for a specific sum and for a specific length of time, typically for a period up to 20 years. If the insured person dies within the term of the cover, the life assurance company

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Latest Private Client News

Question of the week: Where a trust of a life policy otherwise falls within the definition of an 'excluded trust' set out in paragraph 4 of Schedule 3A of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, does it lose that excluded trust status if it opens a non-interest bearing bank account in order to pay insurance premiums for the policy?

This Q&A considers whether a trust of a life policy, which otherwise falls within the definition of an 'excluded trust' as set out in the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, Sch 3A, para 4 loses its excluded trust status if it opens a non-interest bearing bank account to pay insurance premiums for the policy.

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