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Life Insurance in Trust UK




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TL;DR

Taking out a life insurance policy is one of the most fundamental acts of financial responsibility you can undertake for your loved ones. It’s a promise that, should the worst happen, your family will have a financial cushion to help them navigate a difficult time. However, many people are unaware of a simple, yet incredibly powerful, step that can dramatically increase the effectiveness of their policy: placing it in trust.

Key takeaways

  • Validating the will (if one exists).
  • Appointing executors to manage the estate.
  • Identifying and valuing all the assets.
  • Paying off any outstanding debts and taxes, including Inheritance Tax.
  • Distributing the remaining assets to the beneficiaries named in the will.

Taking out a life insurance policy is one of the most fundamental acts of financial responsibility you can undertake for your loved ones. It’s a promise that, should the worst happen, your family will have a financial cushion to help them navigate a difficult time. However, many people are unaware of a simple, yet incredibly powerful, step that can dramatically increase the effectiveness of their policy: placing it in trust.

While the term "trust" might sound like something reserved for the super-wealthy with sprawling estates, it's actually a straightforward and often free tool available to almost anyone with a life insurance policy. Doing so can be the difference between your family receiving a payout in a matter of weeks, or waiting for many months, even years.

This definitive guide will walk you through everything you need to know about life insurance trusts in the UK. We’ll demystify the jargon, explore the significant benefits, and provide a clear, step-by-step process for setting one up. Whether you're a parent, a homeowner, a business owner, or self-employed, understanding trusts is key to ensuring your life insurance provides the maximum benefit to the people you care about most, exactly when they need it.

How setting up a trust can help speed up payouts and avoid probate

When you pass away, everything you own – your property, savings, investments, and personal belongings – becomes part of your 'estate'. If you have a life insurance policy that is not written in trust, the payout from that policy is also typically added to your estate. Before your loved ones can access any of these assets, your estate must usually go through a legal process called probate (or 'Confirmation' in Scotland).

What is Probate?

Probate is the official process of administering a deceased person's estate. It involves:

  1. Validating the will (if one exists).
  2. Appointing executors to manage the estate.
  3. Identifying and valuing all the assets.
  4. Paying off any outstanding debts and taxes, including Inheritance Tax.
  5. Distributing the remaining assets to the beneficiaries named in the will.

This process is rarely quick. According to recent figures from HM Courts & Tribunals Service, the average time for a grant of probate to be issued can be several months, and complex cases can drag on for over a year. During this period, the life insurance money is effectively frozen and inaccessible. This delay can cause immense financial strain for a grieving family who may need the funds urgently to cover funeral costs, pay the mortgage, or simply manage day-to-day living expenses.

The Trust Solution: The Financial Express Lane

Now, let's look at the scenario where your life insurance policy is held in a trust.

A trust is a legal arrangement that separates your life insurance policy from the rest of your estate. When you place your policy in trust, you are no longer the legal owner. Instead, it is legally owned by your chosen 'trustees' for the benefit of your chosen 'beneficiaries'.

Because the policy is not legally part of your estate upon your death, the payout does not need to go through the probate process. As soon as the insurer has the necessary documents (primarily the death certificate), the trustees can make a claim. The insurer then pays the money directly to the trustees, who can distribute it to your beneficiaries according to your instructions.

Think of it this way: your estate is a busy town centre with lots of traffic and legal junctions to navigate (probate). A life insurance policy in trust is like having a private bypass road that takes the money directly and quickly to its destination.

FeatureWithout a TrustWith a Trust
OwnershipYou own the policy; it's part of your estate.The trust owns the policy; it's separate from your estate.
Payout ProcessPayout goes into your estate.Payout goes directly to the trustees.
ProbateYes, the payout is subject to probate.No, the payout bypasses probate.
Payout SpeedMany months, sometimes over a year.Typically a few weeks after claim.
Access to FundsDelayed until probate is granted.Quick access for beneficiaries.

This single structural difference is the key to unlocking the money from your policy far more rapidly, providing immediate support for your family when they need it most.

What Exactly is a Life Insurance Trust?

Let's break down the concept of a trust into its simple components. A trust is essentially a legal wrapper that you put around an asset – in this case, your life insurance policy. This wrapper changes the legal ownership of the policy and sets out clear rules for how it should be managed.

There are three key roles involved in any trust:

  • The Settlor (or Grantor): This is you, the person who sets up the trust and places their life insurance policy into it. You are 'settling' the asset into the trust.
  • The Trustees: These are the people (or sometimes a company) you appoint to legally own and manage the trust. You should choose people you trust implicitly to act in the best interests of your beneficiaries. They are the legal guardians of the policy. You will typically be a trustee yourself, alongside at least two others.
  • The Beneficiaries: These are the people you want to receive the money from the life insurance payout. They are the ultimate reason the trust exists.

The legal document that creates this arrangement is called a Trust Deed. It's the instruction manual for the trustees, signed by you and them, that makes the whole thing legally binding.

The relationship works like this:

  1. You (The Settlor) take out a life insurance policy.
  2. You complete a Trust Deed, transferring legal ownership of the policy to your chosen Trustees.
  3. When you pass away, the insurance company pays the policy proceeds to the Trustees.
  4. The Trustees then distribute the money to your Beneficiaries according to the rules of the trust and your wishes.

It’s a simple but robust legal framework that ensures your wishes are carried out efficiently and effectively.

The Key Benefits of Using a Trust for Your Life Insurance

Beyond speeding up the payout, placing your life insurance in trust offers several other profound advantages that can protect your family's financial future.

Faster Payouts

As we've established, this is the primary benefit. Awaiting probate can put families in a precarious position. Immediate expenses don't wait for legal paperwork. Funeral costs, which average over £4,000 in the UK according to SunLife's 2024 Cost of Dying report, are often one of the first major bills. Add to this ongoing mortgage or rent payments, utility bills, and childcare costs, and the need for swift access to funds becomes crystal clear. A trust ensures the financial safety net you've paid for is available almost immediately.

Avoiding Inheritance Tax (IHT)

This is arguably the most significant financial benefit. Inheritance Tax is a 40% tax levied on the value of a person's estate above a certain threshold, known as the Nil-Rate Band.

  • For the 2025/26 tax year, the Nil-Rate Band is £325,000.
  • There's also a Residence Nil-Rate Band of £175,000 if you pass your main home to direct descendants.

If your life insurance payout is added to your estate, it can easily push the total value over these thresholds, resulting in a hefty tax bill.

Let's look at an example:

Sarah is a single parent with an estate valued at £400,000 (including her home, savings, and investments). She has a £250,000 life insurance policy.

  • Scenario 1: Policy NOT in Trust

    • Total Estate Value: £400,000 (assets) + £250,000 (life insurance) = £650,000.
    • Her estate exceeds the combined thresholds, and a significant portion of the life insurance payout could be lost to IHT. Her beneficiaries would face a potential 40% tax on the amount above the threshold, losing tens of thousands of pounds.

  • Scenario 2: Policy IS in Trust

    • Total Estate Value for IHT: £400,000. This is within the combined IHT thresholds, so no IHT is due on her main estate.
    • Life Insurance Payout: £250,000. This is held outside the estate and is paid directly to her beneficiaries, completely free of Inheritance Tax.

By using a trust, Sarah ensures her children receive the full £250,000, exactly as she intended. This simple piece of paperwork can save a family up to 40% of the policy's value.

More Control Over Your Money

A trust gives you a remarkable degree of control over how and when your money is distributed, long after you're gone. This is particularly valuable if you have:

  • Young Children: You probably wouldn't want an 18-year-old to suddenly receive a lump sum of £200,000. A trust allows your trustees to manage the money, releasing funds for specific needs like university fees, a house deposit, or a wedding, according to your wishes.
  • Vulnerable Beneficiaries: If a beneficiary has a disability, struggles with addiction, or is not financially responsible, a trust ensures the money is used for their care and well-being, managed by sensible hands.
  • Complex Family Structures: In blended families, a trust can ensure that children from a previous relationship are provided for, alongside a current partner.

This control is often exercised through a 'Letter of Wishes', which we'll discuss later. It's your personal guide to the trustees, explaining your intentions.

Protection from Other Financial Risks

Because the money in the trust is legally separate from your beneficiaries' own assets until it is paid out to them, it can be shielded from certain external threats. For example, if a beneficiary were going through a divorce or bankruptcy proceedings, the funds held within the trust for their benefit would generally be protected from being included in any financial settlements.

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The Different Types of Trusts for Life Insurance

When setting up a trust, you'll need to choose the type that best suits your circumstances. The two most common types offered by UK insurers are Absolute Trusts and Discretionary Trusts.

Absolute Trusts (or 'Bare Trusts')

An Absolute Trust is the simplest form. The beneficiaries are named specifically in the trust deed from the very beginning.

  • Key Feature: The beneficiaries and their respective shares are fixed and cannot be changed once the trust is created.
  • Who it's for: Someone with a very simple family structure who is absolutely certain about who should benefit and in what proportions. For example, a parent who wants their policy to be split equally between their two children, with no possibility of this changing.
  • Pros: Simple to understand and set up.
  • Cons: Completely inflexible. It cannot adapt to changes in your life, such as having more children, a beneficiary passing away before you, or a family fallout.

Discretionary Trusts (or 'Flexible Trusts')

This is by far the most popular and widely recommended type of trust for life insurance.

  • Key Feature: Instead of naming specific beneficiaries, you name a class of potential beneficiaries (e.g., "my spouse, my children, my grandchildren"). The trustees then have the 'discretion' to decide who receives money, how much they get, and when they get it.
  • Who it's for: Almost everyone. It's perfect for young families whose circumstances might change, blended families, or anyone who wants to provide their trustees with the flexibility to adapt to the family's needs at the time of their death.
  • Your Guidance: You guide the trustees' decisions by writing a Letter of Wishes. This isn't legally binding, but it provides clear moral guidance on your intentions. You can update this letter whenever your circumstances change without any legal fuss.
  • Pros: Highly flexible, adapts to changing family circumstances, provides greater control over distributions.
  • Cons: Relies heavily on you choosing the right trustees and providing them with clear guidance.
Trust TypeBeneficiariesFlexibilityBest For
Absolute TrustNamed, fixed, and unchangeable.None. Set in stone.Simple, unchanging family situations.
Discretionary TrustA class of potential beneficiaries.High. Trustees decide based on your wishes.Most people, especially with young or complex families.

Most insurers provide their own standard trust forms for free when you take out a policy. A specialist broker like WeCovr can help you understand the insurer's forms and choose the right type of trust for your personal situation.

How to Set Up a Life Insurance Trust: A Step-by-Step Guide

The process of setting up a trust is surprisingly straightforward, especially when done at the same time as taking out your policy.

Step 1: Choose Your Life Insurance Policy Before you can put a policy in trust, you need a policy. This is the foundation. You'll need to decide on the type of cover (e.g., Level Term, Decreasing Term, or Whole of Life) and the amount of cover you need. It's also worth considering other protection like Critical Illness Cover or Income Protection to create a comprehensive safety net.

Step 2: Decide on the Type of Trust Based on the information above, decide whether an Absolute or a Discretionary trust is right for you. For most people, a Discretionary Trust is the superior choice due to its flexibility.

Step 3: Choose Your Trustees This is a critical decision. Your trustees will have legal control over a large sum of money. You should choose at least two, but preferably three or four. They should be:

  • Reliable and trustworthy.
  • Financially sensible.
  • Ideally younger than you and likely to outlive you.
  • Willing to take on the responsibility.

You can appoint family members, close friends, or a professional like a solicitor (though they will charge for their services). Always ask them first if they're happy to act as a trustee. You will automatically be a trustee to begin with.

Step 4: Name Your Beneficiaries For an Absolute Trust, you'll name them directly on the form. For a Discretionary Trust, you'll define the class of beneficiaries (e.g., "My wife Jane Doe, my children and my grandchildren"). Be as clear as possible.

Step 5: Complete the Trust Deed Your insurance provider will give you the relevant trust deed form. It will likely be a pre-printed document that you simply need to fill in. You'll need to enter:

  • Your details (the Settlor).
  • The policy details.
  • The trustees' names and addresses.
  • The beneficiaries' details or class.

The form must be signed by you and all your trustees, and each signature must be independently witnessed.

Step 6: Write a Letter of Wishes (for Discretionary Trusts) This is your personal note to your trustees. It should explain how you'd like them to manage the money. For example:

  • "I would like my wife, Jane, to receive 50% of the funds immediately."
  • "I would like the remaining 50% to be held for my children, to be used for their education and wellbeing."
  • "I would like each child to receive their share of the remaining capital when they reach the age of 25."

Keep it with your will and other important documents, and give a copy to your lead trustee. Remember to review and update it every few years or after a major life event.

Step 7: Store the Documents Safely The completed and signed Trust Deed is a vital legal document. Keep the original with your life insurance policy documents and ensure your executors and trustees know where to find it.

Special Considerations for Business Owners, Directors, and the Self-Employed

Protection planning is not just for personal life; it's a cornerstone of sound business planning. Trusts play a crucial role here too.

Relevant Life Policies

A Relevant Life Policy is a death-in-service benefit paid for by a company, for an employee or director. It's a highly tax-efficient way for small businesses to provide life cover, as the premiums are typically an allowable business expense and aren't treated as a benefit-in-kind. For these tax advantages to apply, the policy must be written into a specific type of discretionary trust from the outset.

Key Person and Shareholder Protection

Businesses often take out insurance to protect against the financial consequences of losing a key director or partner.

  • Key Person Insurance: The payout goes to the business to cover lost profits or recruitment costs. A trust isn't typically used here as the business is the beneficiary.
  • Shareholder/Partnership Protection: This provides funds for the surviving owners to buy the deceased's shares from their estate. These arrangements are complex and almost always use a combination of life policies held in trust and legal agreements called cross-option agreements to ensure a smooth transition of ownership.

Executive Income Protection

While not a life policy, this is a vital product for company directors. It's an income protection policy owned and paid for by the company, providing a replacement salary to a director if they're unable to work due to long-term illness or injury. The premiums are a business expense, and it provides security for the company's most valuable assets – its leaders.

The Self-Employed and Freelancers

If you're self-employed, you are your own safety net. You have no employer providing sick pay or death-in-service benefits. A robust protection portfolio, including Income Protection or Personal Sick Pay, Critical Illness Cover, and Life Insurance, is essential. For freelancers, placing their personal life insurance policy in trust is just as critical as for anyone else, ensuring their dependents can access funds quickly without being entangled in the complexities of a business and personal estate.

Common Pitfalls and Mistakes to Avoid

While the process is simple, there are a few common errors to be aware of:

  • Delaying the Decision: It's easiest to set up a trust when you first take out the policy. While you can place an existing policy in trust, it can be more complicated and may have different tax implications.
  • Choosing the Wrong Trustees: Don't just pick names out of a hat. This is a serious legal responsibility. Choose dependable people who you are confident will act with integrity.
  • Not Updating Your Letter of Wishes: Life changes. A Letter of Wishes written when your children are toddlers will look very different from one written when they are adults with their own families. Review it every 3-5 years.
  • "DIY" on Complex Estates: The free trust forms provided by insurers are excellent for the vast majority of people. However, if your estate is particularly large or complex (e.g., involving overseas assets or business interests), it is wise to seek specialist legal and tax advice to ensure the trust is structured correctly.

Beyond the Payout: The Added Value of Modern Protection

Today's insurance policies often come with a suite of valuable benefits that you can use from day one, without even needing to make a claim. Many top UK insurers now include:

  • Remote GP Services: 24/7 access to a virtual GP appointment for you and your family.
  • Mental Health Support: Access to counselling and therapy sessions to help you cope with stress, anxiety, and other challenges.
  • Second Medical Opinions: If you're diagnosed with a serious condition, you can get your case reviewed by a world-leading expert.
  • Fitness and Nutrition Programmes: Discounts on gym memberships, fitness trackers, and health screening.

These services are designed to help you live a longer, healthier life. At WeCovr, we champion this holistic approach to wellbeing. We believe that supporting our clients goes beyond just finding the right policy. That's why, in addition to our expert advice, we provide our customers with complimentary access to our proprietary AI-powered calorie and nutrition tracker, CalorieHero. It's our way of helping you build and maintain the healthy habits that form the foundation of a secure future.

Understanding the nuances of different trusts, insurer rules, and how they interact with products like Critical Illness Cover can feel daunting. This is where working with an expert broker like WeCovr makes all the difference.

Our specialists live and breathe this market. We can walk you through the entire process, from comparing quotes from all the UK's leading insurers to find the most suitable and affordable cover, to helping you understand and complete the trust forms correctly. We ensure your policy is set up perfectly to protect your loved ones, giving you complete peace of mind. Whether you need a simple Life Protection plan, a more comprehensive Life and Critical Illness Cover policy, or a flexible Family Income Benefit, we are here to provide clear, jargon-free advice.

Frequently Asked Questions (FAQs)

Can I put an existing life insurance policy in trust?

Yes, you can. It's known as an 'assignment' of the policy to the trust. However, the process is slightly different from setting up a trust with a new policy and it's important to get it right. Depending on the type of policy and when it was taken out, there could also be different Inheritance Tax implications, so it's a good idea to seek advice.

Is setting up a life insurance trust expensive?

No. For the vast majority of people, it is completely free. All major UK life insurers provide standard trust forms free of charge when you take out a policy with them. You would only typically incur costs if you have a very complex estate and choose to hire a solicitor to draft a bespoke trust deed.

Who can be a trustee?

Almost any adult over the age of 18 who is of sound mind can be a trustee. This can include family members, friends, or a professional such as a solicitor or accountant. The most important thing is that you choose people who are responsible, trustworthy, and willing to take on the role.

How many trustees should I have?

You will be one of the initial trustees, but you need others who will survive you. It is strongly recommended to have at least two other trustees. Appointing three or four is often a good idea, as it provides a backup in case one is unable to act when the time comes.

Does a trust affect my Critical Illness Cover?

This is an excellent question. When you have a combined Life and Critical Illness policy, the trust is usually set up so that the critical illness element is a 'retained benefit'. This means that if you make a claim for a critical illness, the payout comes directly to you, the policyholder, as you are the one who needs the financial support. The trust arrangement only applies to the life insurance payout upon your death.

What is Gift Inter Vivos insurance?

A Gift Inter Vivos policy is a special type of life insurance designed to cover a potential Inheritance Tax liability on large gifts you make during your lifetime. If you die within seven years of making the gift, it may be subject to IHT. This policy provides a lump sum to cover that tax bill, ensuring the recipient of your gift receives its full value. These policies are also typically placed in trust.

The Final Word

Life insurance is about peace of mind. It’s about knowing that you've done everything you can to protect your family's future. Placing your policy in trust is a simple, powerful, and usually free extension of that promise.

It transforms your policy from a simple financial product into a highly efficient and protected legacy. By avoiding the delays of probate, saving your loved ones a potential 40% tax bill, and giving you ultimate control over your legacy, a trust ensures your foresight and planning deliver the maximum possible benefit.

Don't just buy life insurance; make sure it's set up to work as hard as possible for your family. Taking the extra ten minutes to complete a trust form is one of the most valuable financial decisions you will ever make.

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Why life insurance and how does it work?

What is Life Insurance?

Life insurance is an insurance policy that can provide financial support for your loved ones when you or your joint policy holder passes away. It can help clear any outstanding debts, such as a mortgage, and cover your family's living and other expenses such costs of education, so your family can continue to pay bills and living expenses. In addition to life insurance, insurance providers offer related products such as income protection and critical illness, which we will touch upon below.

How does it work?

Life insurance pays out if you die. The payout can be in the form of a lump sum payment or can be paid as a replacement for a regular income. It's your decision how much cover you'd like to take based on your financial resources and how much you'd like to leave to your family to help them deal with any outstanding debts and living expenses. Your premium depends on a number of factors, including your occupation, health and other criteria.

The payout amount can change over time or can be fixed. A level term or whole of life policy offers a fixed payout. A decreasing term policy offers a payout that decreases over the term of the cover.

With critical illness policies, a payout is made if you’re diagnosed with a terminal illness with a remaining life expectancy of less than 12 months. While income protection policies ensure you can continue to meet your financial commitments if you are forced to take an extended break from work. If you can’t work because you’ve had an accident, fallen sick, or lost your job through no fault of your own, income protection insurance pays you an agreed portion of your salary each month.

Income protection is particularly helpful for people in dangerous occupations who want to be sure their mortgage will always be covered. Income protection only covers events beyond your control: you’re much less likely to be covered if you’re fired from your job or if you injure yourself deliberately.

Questions to ask yourself regarding life insurance

Just ask yourself:
👉 Who would pay your mortgage or rent if you were to pass away or fall seriously ill?
👉 Who would pay for your family’s food, clothing, study fees or lifestyle?
👉 Who would provide for the costs of your funeral or clear your debts?
👉 Who would pay for your costs if you're unable to work due to serious illness or disability?

Many families don’t realise that life, income protection and critical illness insurance is one of the most effective ways to protect their finances. A great insurance policy can cover costs, protect a family from inheriting debts and even pay off a mortgage.

Many would think that the costs for all the benefits provided by life insurance, income protection insurance or critical illness insurance are too high, but the great news is in the current market policies are actually very inexpensive.

Benefits offered by income protection, life and critical illness insurance

Life insurance, income protection and critical illness insurance are indispensable for every family because a child loses a parent every 22 minutes in the UK, while every single day tragically 60 people suffer major injuries on the UK roads. Some people become unable to work because of sickness or disability.

Life insurance cover pays out a lump sum to your family, loved ones or whomever you choose to get the money. This can be used to secure the financial future of your loved ones meaning they would not have to struggle financially in the event of your death.

If it's a critical illness cover, the payout happens sooner - upon diagnosis of a serious illness, disability or medical condition, easing the financial hardship such an event inevitably brings.

Income protection insurance can be very important for anyone who relies on a pay check to cover their living costs, but it's especially important if you’re self-employed or own a small business, where your employment and income is a bit less stable. It pays a regular income if you can't work because of sickness or disability and continues until you return to paid work or you retire.

In a world where 1 in 4 of us would struggle financially after just four weeks without work, the stark reality hits hard – a mere 7% of UK adults possess the vital shield of income protection. The urgency of safeguarding our financial well-being has never been more palpable.

Let's face it – relying on savings isn't a solution for everyone. Almost 25% of people have no savings at all, and a whopping 50% have £1,000 or less tucked away. Even more concerning, 51% of Brits – that's a huge 27 million people – wouldn't last more than one month living off their savings. That's a 10% increase from 2022.

And don't even think about state benefits being a safety net. The maximum you can expect from statutory sick pay is a mere £109.40 per week for up to 28 weeks. Not exactly a financial lifeline, right?

Now, let's tackle a common objection: "But I have critical illness insurance. I don't need income protection too." Here's the deal – the two policies apply to very different situations. In a nutshell:

  • Critical illness insurance pays a single lump sum if you're diagnosed with or undergo surgery for a specified potentially life-threatening illness. It's great for handling big one-off expenses or debts.
  • Income protection, on the other hand, pays a percentage of your salary as a regular payment if you can't work due to illness or injury. It's the superhero that tackles those relentless monthly bills.

Types of life insurance policies

Common reasons for getting a life insurance policy are to:
✅ Leave behind an amount of money to keep your family comfortable
✅ Protect the family home and pay off the mortgage in full or in part
✅ Pay for funeral costs

Starting from as little as a couple of pounds per week, you can do all that with a Life Policy.

Level Term Life Insurance
One of the simplest forms of life insurance, level term life insurance works by selecting a length of time for which you would want to be covered and then deciding how much you would like your loved ones to receive should the worst happen. Should your life insurance policy pay out to your family, it would be in a lump sum amount that can be used in whatever way the beneficiary may wish.

Decreasing Term Life Insurance
Decreasing term life insurance works in the same way as level term, except the lump sum payment amount upon death decreases with time. The common use for decreasing term life cover is to protect against mortgage repayment as the lump sum decreases along with the principal of the mortgage itself.

Increasing Term Life Insurance
Increasing term life insurance aims to pay out a cash sum growing each year if the worst happens while covered by the policy. With increasing term life cover amount insured increases annually by a fixed amount for the length of the policy. This can protect your policy's value against inflation, which could be advantageous if you’re looking to maintain your loved ones’ living standards, continue paying off your mortgage in line with its repayment schedule and cover your children’s education fees.

Whole of Life Insurance
Whereas term life insurance policies only pay out if you pass away during their term, whole of life insurance pays out to your beneficiaries whenever this should happen. The most common uses for whole life insurance are to cover the costs of a funeral or as a vehicle for your family's inheritance tax planning.

Family Income Benefit
Family income benefit is a somewhat lesser-known product in the family of life insurance products. Paying out a set amount every month of year to your beneficiaries, it is the most cost-effective way of maintaining your family's living standards to an age where you'd expect them to be able to support themselves financially. The most common use would be for a family with children who are not working yet so are unable to take care of themselves financially.

Relevant Life Insurance
Relevant Life Insurance is a tax-efficient policy for a director or single employee. A simple level term life insurance product, it is placed in a specific trust to ensure its tax efficiency. The premiums are tax deductible and any benefit payable should a claim arise is also paid out tax free, which makes it an attractive product for entrepreneurs and their businesses.

Important Fact!

There is no need to wait until the renewal of your current policy.
We can look at a more suitable option mid-term!

Why is it important to get life insurance early?

👉 Many people are very thankful that they had their life, income protection, and critical illness insurance cover in place before running into some serious issues. Critical illness and income protection insurance is as important as life insurance for protecting your family's finances.

👉 We insure our cars, houses, bicycles and even bags! Yet our life and health are the most precious things we have.

Easily one of the most important insurance purchases an individual or family can make in their lifetime, the decision to buy life, income protection, critical illness and private medical health insurance can be made much simpler with the help of FCA-authorised advisers. They are the specialists who do the searching and analysis helping people choose between various types of life insurance policies available in the market, including income protection, critical illness and other types of policies most suitable to the client's individual circumstances.

It certainly won't do any harm if you speak with one of our experienced FCA-authorised insurance partner experts who are passionate about advising people on financial matters related to life insurance and are keen to provide you with a free consultation.

You can discuss with them in detail what affordable life, income protection, critical illness or private medical health insurance plan for the necessary peace of mind they would recommend! WeCovr works with some of the best advisers in the market.

By tapping the button below, you can book a free call with them in less than 30 seconds right now:

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Life, income protection, and/or critical illness insurance are safety nets, very important at a difficult time. If anything happened to you before your cover ends, your life or critical illness insurance would pay a lump sum to your family and/or you (if you took a critical illness or income protection cover) to help cover the losses. Being diagnosed with a critical illness can be devastating, and it won't help matters to be also worrying about how you would cope financially. With a life, income protection, or critical illness policy, you can choose how much cover you need, how you want the policy to pay out, and whether you want cover for both you and your partner. Income protection insurance pays you a regular income if you can't work because of sickness or disability and continues until you return to paid work or you retire. Also known as permanent health insurance, it is quite important for anyone who relies on a paycheck to cover their living costs, but it's particularly important if you're self-employed or own a small business, where your income might be a bit less stable.

Life, income protection, and critical illness insurance pay out millions to families every day. Your expert will explain to you that you need to be honest and open when applying for your insurance.

If you're single with no dependants then it may be that you don't need life assurance. However, if you were to become seriously ill and unable to work, you may benefit from a critical illness or income protection policy. They can help you keep up to date with your rent, bills, food, and other expenses.

It's free to use WeCovr to find life, income protection, and critical illness insurance - we never charge you for quotes. Critical illness, income protection, and life insurance is an investment that pays many times over for you and/or your loved ones.

Life, income protection, and critical illness insurance are important financial products that insurance companies take a lot of care and diligence, so speaking to real human beings ensures that they understand your requirements fully so that you can get the right cover.

All of our partners are carefully vetted and authorised by the FCA, which means they are held to the highest standards that the FCA expects from them and treat all customers fairly!

Our insurance partners give us a few pounds when you take out a policy with one of their experts.

The cost of life insurance depends on several factors, including your age, occupation, health status, and the level of coverage you choose. Your life insurance policy is tailored to your needs, and the cost can vary based on the sum assured, policy term, and other factors.

Some life insurance policies offer an option to add critical illness cover as a rider or as a separate policy. This provides a lump sum payment if you are diagnosed with a critical illness covered by your policy, offering financial support during a difficult time.

Yes, life insurance is available to self-employed individuals to provide financial protection for their loved ones in the event of their death. It ensures that your family can maintain their standard of living and cover expenses such as mortgage payments, bills, and education costs.

If you outlive your life insurance policy and it expires without a claim, you will not receive any payout. Term life insurance policies are designed to provide coverage for a specific period, and once that period ends, the policy terminates without any residual value. However, you can typically renew or purchase a new policy if you still need coverage.

Critical illness insurance provides a lump sum payment if you're diagnosed with a serious illness covered by your policy, offering financial support during a difficult time. It can help cover medical expenses, mortgage payments, and other financial obligations while you focus on recovery.

Critical illness insurance covers a range of serious illnesses and medical conditions specified in your policy, such as cancer, heart attack, stroke, and organ failure. The lump sum payment can be used to cover medical treatment, ongoing care, and living expenses during your recovery.

The cost of critical illness insurance varies depending on factors such as your age, health status, lifestyle, and the level of coverage you choose. Our experts can provide personalised quotes to help you find affordable coverage.

Yes, you can have critical illness insurance alongside your health insurance coverage. Critical illness insurance provides additional financial protection specifically for serious illnesses, complementing your health insurance benefits.

Critical illness insurance policies typically have exclusions for pre-existing conditions and certain medical conditions not covered by the policy. It's essential to review the terms and conditions of your policy to understand what is and isn't covered.

Some critical illness insurance policies may provide coverage for recurring illnesses, while others may not. It's crucial to review the policy terms and understand the specific conditions under which you can make additional claims for recurring illnesses. Your insurer can provide more details on their coverage for recurring critical illnesses.

Yes, you can customise your life insurance policy to suit your individual needs and circumstances. Options may include choosing the sum assured, policy term, premium payment frequency, and additional riders for enhanced coverage.

If you miss a premium payment for your life insurance policy, your coverage may lapse, and your policy could be terminated. However, many insurers offer a grace period during which you can make the payment to keep your policy active. It's essential to contact your insurer to discuss your options if you're unable to make a payment.

Yes, you can typically change the beneficiary of your life insurance policy at any time by completing a beneficiary change form provided by your insurer. It's essential to keep your beneficiary designation up to date to ensure that the proceeds are distributed according to your wishes.

Term life insurance provides cover for a fixed period, such as 10, 20 or 30 years, and pays out a lump sum if you die during that time. It’s often chosen to protect a mortgage or to provide financial support while dependants still rely on your income. Whole-of-life insurance is designed to last for the rest of your life and guarantees a payout whenever you die, as long as premiums are maintained. It’s usually more expensive than term insurance and is sometimes used to help with inheritance tax planning or to leave a guaranteed legacy.

Some term life insurance policies offer the option to convert to a whole life insurance policy without the need for a medical exam or new underwriting. This conversion feature allows you to maintain coverage beyond the term of your policy and provides lifelong protection.

Some life insurance policies offer accelerated death benefits or living benefits that allow you to access a portion of the death benefit if you are diagnosed with a terminal illness. This feature provides financial assistance to help cover medical expenses and other costs during your final months.

While having savings can provide a financial cushion during tough times, income protection insurance offers additional security by replacing a portion of your income if you're unable to work due to illness or disability. It ensures that you can maintain your standard of living and cover essential expenses even if your savings are depleted.

Yes, self-employed individuals can claim income protection insurance if they're unable to work due to illness or disability. Income protection provides a regular income stream to replace lost earnings, helping self-employed individuals cover their living expenses and business costs during periods of incapacity.

The waiting period, also known as the elimination period, is the length of time you must wait after becoming unable to work due to illness or disability before you can start receiving benefits from your income protection insurance policy. Waiting periods typically range from 30 to 90 days, but longer waiting periods may result in lower premiums.

Income protection insurance is designed to provide financial support if you're unable to work due to illness or disability, not for redundancy. However, some policies may offer optional redundancy cover or unemployment cover as an additional benefit, providing a lump sum or monthly payments if you're made redundant.

The tax treatment of income protection insurance benefits depends on whether the premiums were paid with pre-tax or after-tax dollars. Benefits from policies funded with after-tax dollars are typically tax-free, while benefits from policies funded with pre-tax dollars may be subject to income tax. It's essential to consult with a tax advisor to understand the tax implications of your income protection insurance benefits.

Income protection insurance provides a regular income stream if you're unable to work due to illness or disability, while critical illness insurance provides a lump sum payment if you're diagnosed with a covered critical illness, such as cancer, heart attack, or stroke. Critical illness insurance offers financial support to cover medical expenses, living costs, or other obligations during your recovery.

Income protection insurance policies typically have a waiting period (also known as an elimination period) during which you do not receive benefits. If you become unable to work before this waiting period ends, you will not receive any income protection benefits until the waiting period has elapsed. It's important to have sufficient savings or other financial resources to cover your expenses during this initial period.

Many income protection insurance policies allow you to increase your coverage amount if your income rises, without the need for additional underwriting or medical examinations. This feature, sometimes called a 'guaranteed insurability option,' ensures that your coverage keeps pace with your increasing income and financial obligations.

The maximum age to purchase critical illness insurance varies depending on the insurer and the specific policy. While some insurers may offer critical illness insurance up to age 70 or beyond, others may have lower age limits. It's essential to check with insurers to determine their age eligibility criteria for purchasing critical illness insurance.

Whether you can get critical illness insurance if you have pre-existing conditions depends on the insurer's underwriting guidelines and the specific medical conditions. Some insurers may offer coverage with exclusions for pre-existing conditions, while others may decline coverage altogether. It's essential to disclose any pre-existing conditions when applying for critical illness insurance and discuss your options with insurers.

While health insurance provides coverage for medical expenses, critical illness insurance offers financial protection for broader expenses associated with a serious illness, such as lost income, household bills, and lifestyle changes. Critical illness insurance complements health insurance by providing additional financial support during a challenging time, ensuring that you can focus on recovery without worrying about financial burdens.

If you don't make a claim on your critical illness insurance during the policy term, you won't receive a benefit payout. However, having critical illness insurance provides peace of mind knowing that you're financially protected if you're diagnosed with a covered critical illness during the policy term. It's a form of financial preparation for unexpected events and offers valuable protection for you and your family.

If you outlive your critical illness insurance policy and don't make a claim for a covered critical illness during the policy term, the coverage will expire, and you won't receive a benefit payout. Critical illness insurance provides financial protection for a specific period, typically until a specified age or policy term, and offers peace of mind knowing that you're prepared for the unexpected.

Yes, many insurers offer optional riders or add-ons that you can add to your critical illness insurance policy for enhanced coverage. Common riders may include waiver of premium, which waives future premium payments if you become disabled, or return of premium, which refunds a portion of your premiums if you don't make a claim during the policy term. It's essential to review available riders with insurers to customise your coverage to meet your specific needs.

To make a claim on your critical illness insurance policy, you'll need to notify your insurer of your diagnosis and submit a claim form along with any required medical documentation, such as medical reports, test results, and physician statements. Once your claim is reviewed and approved by the insurer, you'll receive the lump sum benefit payment, which you can use to cover medical expenses, living costs, or other financial needs during your recovery.

As we age, the likelihood of encountering health complications increases for us all. In the event that you develop a severe medical condition, critical illness protection can assist with the expenses of crucial bills – enabling you to concentrate on recuperation or adjusting to your new health circumstance.

The typical expense of a Critical Illness protection policy will fluctuate based on aspects such as your age and medical background. As per our investigation, you can secure a policy starting from as low as £8 (for a non-smoking 21-year-old individual).

The most prevalent critical illnesses in the UK are cancer, cardiac arrest, and cerebrovascular accident (stroke).

Cancer is one of the primary causes for critical illness insurance claims in the UK. Cancer constitutes over 80% of critical illness cover claims for females and about 45% of critical illness claims for males.

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Since 2011, WeCovr has helped thousands of individuals, families, and businesses protect what matters most. We make it easy to get quotes for life insurance, critical illness cover, private medical insurance, and a wide range of other insurance types. We also provide embedded insurance solutions tailored for business partners and platforms.

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