Life Insurance to cover IHT

marbella

I am looking for a life insurance policy to cover a potential iht bill of around £150,000 if anything were to happen to me and it leaves my child with a huge bill. A 16 year old can't afford to pay this and obviously can't take out a loan to cover it. I would not like to see my child having to sell to cover iht. I need serious advice if anyone can help. thanks

dunstonh

I need serious advice if anyone can help

This website is not authorised by the FSA and cannot give regulated financial advice. Even those of us posting who are regulated cannot give advice as that has certain requirements that cannot be met on a forum. Most importantly, knowing the facts before giving the advice.

So, anything that is posted here is not advice. It is discussion, views and opinions only.

Your child doesnt have to pay the tax bill. The executor of the estate pays the bill from the estate before it is passed to your son. If there is £150k of liquid assets available (cash, investments etc), then these will be used. If not, then assets will be sold to pay the bill (property etc). Your son will then receive the remainder of the estate.

If the bulk of the estate is made up of assets you dont want sold, then you need the life policy to pay the tax bill.

The usual policy needed for this is a whole of life policy. These fall under investment classification and not protection classification. So, most online sites do not give coverage to whole of life assurance as they only hold protection authorisation. Even those that do hold investment authorisation do not normally have good coverage on their whole of life assurance for three reasons 1) its low profit and there isnt much scope for discounting 2) the quote systems themselves are not built well for whole of life and to get decent coverage requires manual work 3) there are some big differences between the providers and you cannot compare like for like knowing just the premium.

I suggest you get a local IFA out to do the work. I would look for a non-investment linked whole of life assurance where you can amend the sum assured periodically (as asset prices change and IHT allowances move as well).

As I said, that isnt advice just information to help you with your own research.

marbella

Thanks so much, this is just the kind of info I needed. I will talk to an advisor next week. Thanks again.