Existing Private and Business Life Insurance Policies After Coronavirus

Published / Last Updated on 23/07/2020

We urge all people to revisit your existing life insurance and critical illness insurance policies to check that they are in trust.

If your private life insurance policy is not in trust on death, the benefits would be paid out to the estate. This may also create:

  1. Delays in insurance pay outs as it can only be distributed when probate has been granted
  2. Inheritance tax may be increased if your policy is not in trust for others and is paid to your estate
  3. If the policy is in trust for loved ones it can be paid out immediately and also does not form part of your estate for inheritance tax.

If your business life insurance, directors share protection or partnership share protection is not in trust and part of a ‘cross-option’ agreement with fellow business owners:

  1. Your business assets may pass to loved ones who do not want to run the business
  2. If your business partner passes, do you really want to be in business with their relatives/loved ones?
  3. If you do not have the option to buy your deceased business partner’s share, you are wide open for that share to be sold out to unknows organisations or even a competitor.

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