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Benefits of trusts and how to use one
for Critical Illness Insurance Cover! |
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If a life insurance
policy is taken out on a joint life
basis then the need for a trust is far
smaller, than that of a single life
insurance policy. If a claim on joint
life policy is made then the proceeds
are given to the surviving policyholder.
However with a single life insurance
policy the proceeds would instead go to
the deceased estate. If they have a will
then this may take several months.
Unfortunately most people do not have
wills and thus in a case where no will
is present the funds may be 6 - 12
months before they go to the correct
individual.
With single life insurance policies to
prevent the funds going to the estate
potentially getting taxed inheritance
tax on the sum and taking a long time to
reach the beneficiary a trust is set up.
With life insurance only a straight
forward trust is put in place this is
normally done by a financial adviser.
However with a Critical Illness Policy a
different type of trust is required.
This is because if the policy holder
dies the funds will be required to go to
the beneficiary however if the
policyholder gets a critical illness
then the sum assured will be required to
go to the policyholder as they will
still be alive and will require the sum
assured.
A specific kind of trust is needed and
this is called either a flexible trust
or sometimes known as a discretionary
split trust. To ensure the right trust
is used it is best to use a financial
adviser. A trust for critical illness
should ensure the funds go to the
beneficiaries in death but are given to
the policyholder for a critical illness
claim.
There are no benefits to writing a
standalone Critical Illness policy in
trust as the benefits are payable to the
policyholder.
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- Cover starts from as little as *£5 per month
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*£5.00 Per month quote based on 25 Year
old female Non Smoker for £102,740
guaranteed level life cover only for
term of 25 Years.
**Take out life insurance before 31st
December 2010 and receive a £25.00 gift voucher. Voucher sent
once 3 months premiums are paid. If you
cancel within this period the voucher
will not be paid. One voucher per
customer. |
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