Whole of Life or Term life insurance

milla

I would appreciate some thoughts on my position please.

My estate faces an IHT bill which I would like to address.

I am looking at taking out a life insurance policy in order to mitigate the bill.

I understand that I could take out a Whole of Life policy or a Term policy .

I intend to give some money away to my (adult ) children in the next couple of years which , should I live beyond seven years I believe would be out of the estate

I cannot understand why a Whole of Life policy would be beneficial to me once I have gifted the money ?

I am becoming confused and would appreciate some advice .

Could anyone give me your thoughts please.

Thanks

Quentin

Term life insurance (eg for 9/10 years) would cover your children's gifts should you go before the 7 year term is up.


Whole of life would mean they get the policy proceeds whenever you go (assuming you keep paying it up to the end)

milla

Thanks Quentin . So Whole of Life is overkill for what I am trying to achieve would you say ?

dunstonh

I cannot understand why a Whole of Life policy would be beneficial to me once I have gifted the money ?

it wouldnt be.

A decreasing term assurance would be more logical. That assumes that you stick to a fixed plan.

milla

By fixed plan ... do you mean that I DID actually gift the money away ?

Also I have just read somewhere a suggestion that instead of going for Whole of Life
one could go for Term ...and invest the difference ....but is that not just confusing things ?

Keep_pedalling

We have a term policy that will only pay out on the second death. The premiums are low, and covers our current IHT liability. Once it's run out the gifts we have given our children will be out of the estate, so we may should longer need such cover then, but who knows what IHT rules will be the place by then.

Is there any reason you are delaying gifts to your children for a year or 2? If that plan is definite then do it ASAP.

milla

My son is going through a break up ...so I don't want to give money there until their finances are well and truly separated ......

My daughter needs to find out where she stands with Right to Buy her housing association home .

As regards changes in rules ... yes it would be good to have a crystal ball !

I am leaning towards a 15 year term ...which would give me a bit of leeway and less urgency .Maybe I can review after a time ?

Thanks for your comments .