A Guide To Life Insurance - The Whole-life Policy Examples ....

 

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The Whole-life Policy Examples...

Example

Mr Carter, a widower of 63, has built up a business he would like to pass on to his son.

His liability to CTT on death would be £300,000, and so he takes out a non-profit whole-life policy with a £300,000 sum assured.

The policy is written under trust for the benefit of his son. If this were not done, the policy proceeds would be added to his estate and also attract tax, but in this way the proceeds will be exempt.

The annual premium is about £2700 gross or £2577.5 after tax relief.

Where husband and wife are both living and do not wish the assets to pass to their children until both are dead, a joint life and last survivor policy is often used.


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Mr and Mrs Dell, aged 68 and 65, have a large property and assets which they wish to pass on to their three children only when both of them are dead.
Since no CTT is payable on a transfer between husband and wife, no tax will be payable on the death of the first of them. So they take out a joint non-profit whole-life policy with the sum assured of £220,000 payable on the second death, again written under trust for the benefit of the children to avoid any tax liability on the proceeds......... see: click here for Partnerships


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