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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.”


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  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!

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