The Importance of Putting Protection Policies in Trust

Three Reasons why it’s important to putting your protection Policy into Trust:

Better control – Making sure the money goes to who you intended it to at the right time

Faster Payments – When a protection policy is in a Trust, the Provider will usually be able to pay the proceeds on receipt of the death certificate. If there is no Trust, they will need to wait until Probate has been granted (which can take some months) which will delay the payment being made to your mortgage provider or your family. Would they be able to maintain living costs whilst waiting for this to be sorted?

Reduces Inheritance Tax Bill – If the policy is set up in a Trust it does not form part of your Estate, which means it will be paid out as a Tax-Free Lump Sum to your beneficiaries. If the policy isn’t in trust, the proceeds will be added to your estate and may potentially be liable to a 40% tax liability, meaning your family may not receive the full amount that you had wished, and had been paying for.

It doesn’t cost anything extra to put your Policy in Trust. If you have a protection policy that you don’t think is in Trust, give us a call and we will be able to help arrange for you.

This blog is not intended to replace independent financial advice, if in doubt, please contact us.