According to figures within the industry, only one in ten life insurance policies are written in to trust.
Whether this is down to people not understanding the benefits or whether people feel that it’s not really necessary is unclear but suffice to say your family could easily lose out if you don’t have a life insurance plan written into trust.
Getting your life insurance policy written into trust is actually a relatively simple process and not as complicated as you might imagine.
So why get a life insurance written in to trust?
A trust offer you a legal way to change ownership of assets like a life insurance policy when you die.
This means that the money goes to the person you want and that any payments are paid quickly. Because the policy technically is in trust for the beneficiary then there will be no need to wait for probate and there won’t be issues with inheritance tax either.
Additionally, the money itself could be completely free from any inheritance tax duty if within the threshold – meaning that you can be certain more money will go to your family if it’s there – rather than be paid as part of the 40% rate.
Just because you have written your policy into trust does not mean you lose control either. You still have a say as to who the policy benefactor will be.
So, rather than buying life insurance and being the nine out of ten policies that are not written into trust, do take a moment or two to consider how you may benefit from having your life insurance policy put into trust.
A little time now could make a big difference later on!