Help needed - Scottish Widows Minimum Cost Whole of Life Plan insurance policy

retirednurse

In 1993 my parents (age 64 and 66) took out a Scottish Widows Minimum Cost Whole of Life Plan insurance policy.
This was intended to pay any death duties/inheritance tax due when they died.

The cover is basic with profits, sum assured £16,580 payable on the second death and additional without profits sum assured £31,615 payable on the second death (assuming the bonuses match those assumed at the offset)
I think this means that they get £48,195 payable on the second death.

Premiums are £100 a month payable for 28 years (until 2020) then reducing to £71 a month thereafter.
The policy is not written into trust as far as we know, we have asked Scottish Widows to confirm this as well as confirming current bonuses, surrender value and amount payable on my fathers death.

My mother died last year, my father is now 85.

My questions are:-

1) Can we now put this policy into trust to remove it from my fathers estate to mitigate Inheritance tax (IHT)?

2) At £1200 a year is this still a decent investment or should we cash in the policy.

It has been suggested that we ask Lloyd's or Halifax to advise us so we will also contact them for advice.

3) At the time (1993, age 64 and 66) were they sold the correct policy and if not is there a route we should follow on a miss selling claim?

I do not fully understand how these policies work so please need some informed help and guidance.

Many thank
retired nurse

warwicktiger

My questions are:-

1) Can we now put this policy into trust to remove it from my fathers estate to mitigate Inheritance tax (IHT)?

2) At £1200 a year is this still a decent investment or should we cash in the policy.

It has been suggested that we ask Lloyd's or Halifax to advise us so we will also contact them for advice.

3) At the time (1993, age 64 and 66) were they sold the correct policy and if not is there a route we should follow on a miss selling claim?

1 - YES, ask the insurer for the suitable trust deed
2- Impossible to answer without knowledge of financial circumstances and current surrender value, but my instinct would be to keep it if there is a likely inheritance liability.
3- Again impossible to answer without Knowledge of the circumstances back in 1993, and hard to demonstrate misselling now in the absence of your mother. Were the advisors written comments and "reasons why" documents retained?

retirednurse

Warwicktiger many thanks for the reply its a great help.

1) Its a relief that we can put the policy in trust now I will get the forms from Scottish Widows and get it done ASAP.

2) There potentially is a large IHT bill coming so advice to keep it in the policy in trust makes real sense. The surrender value is on its way I will post it when it arrives.

3) In 1993 there was concern about a large Death Duties/IHT bill. We have all the original documents which clearly state why the policy was taken out. If this looks like misselling how would we follow this up?

Thanks again retirednurse