Call for life insurance reviews
1st September, 2014
There has been a call for families to carry out a review of their life insurance provision after official figures from HMRC revealed that some are being hit with huge inheritance tax bills.
It is estimated that these tax bills are totaling more than £216 million each year and there are provisions that can be made to prevent families from being hit with these bills upon the death of a loved one. This figure has also increased over the last few years, with the average family seeing a bill of around £41,000.
Industry experts have spoken out against this and have stated that families need to be prepared in case this happens to them. Some life insurance policies can be written into a trust that will prevent the taxman from taking a slice of the payout. For inheritance tax, the taxman can issue a bill for up to 40%.
There are other benefits to putting life insurance into a trust. When a claim is made it can be processed within four weeks, while life insurance going through probate could take a number of months to be processed. For this reason, experts are advising families to conduct a review even if they do not think that inheritance tax is going to be a problem.
Funds from life insurance are often essential for families to continue functioning or to keep businesses going. For this reason, shopping around for the right life insurance policy is advised and families can compare life insurance quotes online.