It’s a hard time when a loved one dies, and if you have to take out a loan just to pay the tax on the inheritance you’ve been left it can cause no end of extra stress for you and your family in your time of grief.

If you want to protect your family or loved ones from this after you die, you can take out inheritance tax insurance to make sure that your family get what you left them, be it money or property, without having to pay a hefty fee to access it. This can sometimes be deeply ironic if you have left money that could, in another circumstance, actually be used to pay this inheritance tax!

If your estate is worth more than £325,000 your relatives will end up paying inheritance tax which can be up to 40% of the value- making it all the more important to insure against it. One way of doing this is to get inheritance tax insurance which allows you to put enough of the money you’ve left aside to be used as costs on the tax, or you can take the more complex route and write your plan into a trust, meaning anything from the policy goes to your beneficiaries and don’t form part of your estate for tax reasons.

You will also need to take into account whether or not you’re married. If you’re single you simply take out a policy for your own life and liability, but if you have a partner you can pass on your assets to your partner, tax free, after your death, though this will end up meaning your partner may end up paying more tax through their life due to increased income.

Unfortunately, cover can be expensive, though if you keep paying the premiums it creates a nice settlement for your loved ones after you’re gone, though family members can help pay the premiums and the cost is calculated depending on the level of cost you want and your age, gender and medical history. You can take three levels of cover, ranging from Maximum cover, which is the cheapest with low premiums- but which may increase at your plan review- Balanced cover, which can either rise or fall in regards to your premium costs, depending on how the plan is going, and Guaranteed cover. This is the most secure cover as the premiums are guaranteed to stay the same; however, this means it’s often the most expensive.

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