Protection7 min read
Using Whole-of-Life Insurance to Pay the IHT Bill
•By ACJ Financial Planning
Life assurance in trust can deliver cash exactly when HMRC calls – without inflating the estate.
How it works
A whole-of-life policy (WOL) written under discretionary trust pays out on death; trustees use proceeds to settle IHT before probate is granted.
Premium affordability vs. yield
The calculation: premium × life expectancy versus the expected tax saving. For many 60- to 75-year-olds, payback can be < 10 years.
Underwriting tips
- Declare all medical conditions upfront – non-disclosure voids the cover.
- Joint-life second-death often cheapest per £.
Remember: Always run scenarios showing the policy inside and outside the estate – written in trust is usually essential.
Need Professional IHT Advice?
Our expert advisers can help you implement the strategies discussed in this article and develop a comprehensive inheritance tax plan tailored to your specific circumstances.