Decreasing term life assurance

dollparts

I took out a life cover plan when I got my mortgage.

As I no longer have the mortgage is is possible to change the conditions of my policy so my daughter may benefit upon my death?

I phoned L&G and they sent me a load of forms which do not explain fully what my options are?

I will call them again this week but thought I could ask here so I have a good idea of what I'm talking about because I find it all a little confusing!

TIA.

lisyloo

As I no longer have the mortgage is is possible to change the conditions of my policy so my daughter may benefit upon my death?

Does your estate exceed the nil rate inhertiance tax band?
If not you could simply write a will leaving what you want to your daughter.
Does your will currently say something different? or is there an IHT issue?

kingstreet

As things stand, the benefits from your policy would simply pass into your estate. Your next of kin or executor would have to settle probate, then distribute your estate's assets among your beneficiaries.

The alternative is to write the policy in trust. You set up the trust. You appoint a few people to act as trustees who would distribute the money to your named beneficiary(ies) on death.

The trust pays the money outside your estate, so no Inheritance Tax implications and probate does not have to be obtained, so it's usually a lot quicker.

Chances are the current policy doesn't match your need for cover precisely. Why not go see a good IFA and have them review the cover. They may suggest replacing it with a new policy and this can be written in trust too.

ACG

simple way to guarentee the money goes to your daughter, is to fill out a trust form.

It will ask for a trustee or 2 - these basically ensure your daughter gets the money (one of these can be your daughter).
L&g will be able to send you a trustee form and have probably already put it in the post.

magpiecottage

kingstreet wrote: »

Chances are the current policy doesn't match your need for cover precisely. Why not go see a good IFA and have them review the cover. They may suggest replacing it with a new policy and this can be written in trust too.

Kingstreet's post has saved me the bother of saying exactly the same thing except to add that even if the current policy is an exact match a good IFA would be likely to find a cheaper replacement if you are still in good health.