View more on these topics

Aegon launches IHT-targeted whole of life policy

Aegon UK has launched a whole of life product aimed at helping beneficiaries cover an inheritance tax bill on the policyholder’s estate when they die.

The new policy, targeted at the 50 plus market, is placed in a discretionary trust and pays out the sum assured upon death of the policyholder or diagnosis of a terminal illness.

As it is written in trust, the entire sum assured is then paid to beneficiaries outside of the estate and exempt from any IHT liability.

A recent survey of 1,650 Aegon UK customers aged 40 and over revealed that while 87 per cent were aware the Government could take 40 per cent of their inheritance on death, only 29 per cent had taken measures to mitigate that liability.

Aegon UK protection director Dougy Grant says the new policy addresses this gap by integrating the process of placing the policy in trust at the point of application.  

Grant says: “Inheritance tax can cost those left behind thousands of pounds worth of additional heartache, yet there are ways to make provisions for this – such as writing life policies in trust – which we estimate is being done in only 10 per cent of cases. Our whole of life policy is one way to address this. It helps to reduce the amount of tax that would have to be paid from the estate, so more can be passed on to the beneficiaries.

“There is £530m paid unnecessarily each year in IHT and we want to help our customers to change that statistic. In addition to this our own research found that most customers are looking for simple solutions to help them manage their IHT liability. With this in mind we’ve undergone a robust product development process to understand the needs of our customers and have designed the product to meet those needs.”

Recommended

Cover 700 x 450
11

Are advisers dressing up advised sales as execution-only?

FCA data showing a spike in non-advised sales through advisers has raised concerns firms are dressing up advice as execution-only to get around suitability requirements. The data shows the number of non-advised sales by financial advice firms more than doubled between 2012 and 2013, from 361,405 to 852,295. The surge means that among advisers, execution-only […]

FCA-FSA-Building-Sky-Contrast-700x450jpg
5

MM leader: The sharp practice of ‘non-advised’ sales

“If it looks and feels like advice, it probably is advice.” So said FCA technical specialist Rory Percival back in April 2013 as he warned on the dangers of hiding behind execution-only disclaimers. Figures from the regulator show some advice firms would do well to heed his words. Data buried on the FCA’s website reveals […]

Steve_Groves_Partnership
17

Life expectancy ‘useless’ for financial planning, advisers warned

Life expectancy estimates are “useless” for financial planning and advisers who use them for cashflow modelling risk their clients running out of money in retirement, Partnership chief executive Steve Groves has warned. Speaking at the Institute of Financial Planning’s annual conference in Newport last week, Groves (pictured) said the average life expectancy for a 65-year-old […]

Benefits - thumbnail

Global benefits predictions for 2015 from Jelf International

According to Doug Rice, managing director of international services, in 2015, managing their international duty of care will become an increasing focus for UK-based overseas organisations in both managing their short- and longer-term challenges. As a result, strong independent advice and innovative technological solutions will become more important than ever in managing their global benefits.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Well done to Aegon for airing this problem and doing something about it. If it’s still really only only 10% going under trust, our life insurance processes are just not fit for purpose in the UK.

    And what’s often overlooked is that even those cases under trust don’t necessarily have a surviving trustee available to avoid the wait for probate, which is the practical issue hitting the the majority although IHT gets given the most attention.

    One poor man named as beneficiary under the trust had to wait for months on end while still having to cover the business loan repayments without his deceased life and business partner’s support. But even worse, he had the worry of not ever being able to get the payment, because he was not married to his partner, and her family were not prepared to get probate unless to gain control of the policy for themselves!

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com