Canada Life is relaunching into the whole-of-life market with a lifetime protector guaranteed product, hoping that it will form a part of inheritance tax planning for IFAs looking after the interests of high-net-worth clients.
The premium and life cover are guaranteed to remain level, with a guaranteed sum payable on death. The product is a non-profit insurance policy and is therefore not dependent on investment performance.
Canada Life suggests the proceeds of the policy be put in trust, so beneficiaries of the proceeds will not be hit with any IHT liabilities. It can be written as a single life or on two lives jointly. For example, a non-smoking couple both aged 70 next birthday were in low-risk occupations while still working and looking for a £200,000 sum assured policy would expect to pay a guaranteed premium of £4,118 a year.
The premium is principally calculated on the type of occupation and the degree of risk attached. If the occupation changes during the term of the policy, the premium will not be altered.
IFA development director Jeremy Pearson says: “Whole-of-life cover is so important these days and we feel this could also form on integral part of IHT planning. For us, the product is keenly priced but not so as to make a loss for the investors.”
Key Retirement Solutions managing director Colin Taylor says: “There is much education to be done on inheritance tax planning. This plays a small part in a very big field.”