PruProtect has launched an inheritance tax calculator to help advisers explain the tax benefits of whole of life cover.
The tool, available on the PruProtect website, calculates the potential IHT liability faced by a client currently and at a projected future date. The calculation is based on growth rates, which the adviser can set. Whole of life cover is often used to cover the cost of any IHT liability.
PruProtect cites the example of a 35 year old with a property valued at £475,000, investments of £50,000 and a pension of £50,000. That client could have an IHT bill of £100,000 today, But in 30 years time they could have accrued an IHT bill of over £864,000, assuming a growth rate of 5 per cent.
PruProtect says the client would benefit by taking out a whole of life policy for a sum assured of £100,000 on an index-linked basis, costing £26.84 a month, which can go towards a significant portion of their IHT liability.
PruProtect distribution and marketing director Justing Taurog says: “Mitigating the burden of IHT is of real benefit to customers and whole of life cover can be extremely cost effective.
“Our new tool will assist advisers when positioning this concept with clients.”