Whole of Life Insurance
Whole of Life Insurance…The Difference.
Most life insurance plans have start dates from when you are insured and end dates when you know that that plan will cease to be in force.
Whole of Life Insurance is different because it is used when you decide that the life insurance cover needs to be in place until the day that you die.
Why Use Whole of Life
The most common reason for Whole of Life to be used is to pay Inheritance Tax Liabilities that may arise for family, relations or friends when they are named as the beneficiaries in a Will.
It can be used to pay tax and is fully approved by Revenue for this purpose.
Tax is payable at 30% on Inheritances that exceed Government & Revenue thresholds. The life insurance will be equal to the calculated tax liability and the sum insured will be used to pay the tax when it arises.
The thresholds are different depending on who is inheriting, for example;
Children of the person giving have the highest threshold and can inherit the most without a liability for tax.
Nephews and nieces are next in line.
Anybody who does not fit into these two groups will have the lowest threshold and be liable for the most tax.
Making a Plan to Avoid Inheritance Tax
The first step is to make a Valid Will.
Based on this any tax liabilities for each beneficiary can be calculated.
This liability is minus any qualifying tax relief and Revenue have specified a number of these that can be used to reduce the tax liability.
We can help you put a plan in place based on practical experience of working with professional advisers such as Solicitors and Accountants to make sure that the Inheritance Tax Plan using Whole of Life Insurance pays any tax due.