Life insurance is a simple, effective and transparent instrument which can protect against many uncertain events, yet wealthy individuals often disregard life insurance, reasoning they have wealth to cover any eventuality.
However, often assets are tied up in property or investments, and there is a limited source of liquidity. When income is high, often spending is too and the premature death of a main wage earner may have significant implications for the whole family. On death, the government retains 40% of an individual’s estate in Inheritance Tax, which is often more than is received by individual family members.
In each of these situations, life insurance can provide a valuable injection of capital and is effective at providing a solution to multiple issues. As an estate planning tool it can provide the cover for Inheritance Tax (IHT), leaving other assets in place to be passed on to the next generation.
It protects debts and businesses and when compared with traditional savings or investment products it can also offer sound returns.
This is a Financial Promotion
Important notice: Investments can go down as well as up and your capital may be at risk.
Because many people prefer not to face their own mortality, life insurance may be difficult to consider. However, the risks of not addressing the subject can be considerable. There are a number of areas where life insurance can be used in wealth planning:
Whole of Life Assurance (WOL) is a solution which resonates with many of our clients due to its simplicity and value driven outcome. WOL can be summarised as follows: