Life Insurance For The Long Term
Similar to all other life insurance plans, this type of plan will pay a lump sum to a spouse / partner or a nominated beneficiary on the death of the policy holder.
Unlike Term Life Insurance which will cease without value at the selected end date and has age limits and Convertible Life Insurance which has a conversion option at the selected end date, Whole of Life Insurance, as the name suggests, can be used to ensure that life insurance is payable on death at any age.
Why Use Whole Life Insurance
There are a number of reasons. One that is very popular is that with Revenue Approval, the proceeds of a whole of life insurance plan can be used to pay any inheritance tax due when children, nieces, nephews, other relations or friends benefit from an inheritance.
Inheritance Tax Thresholds
Revenue have set various tax thresholds depending on the relationship between the owner of the estate ad the beneficiary, for example, children have the highest threshold and pay the lowest tax, while friends have the lowest and pay the highest tax on any inheritance.
How Much Whole of Life Insurance
The starting point for working this out is to make a Will. This will define the value of each inheritance to each person. There is also additional tax relief for the business and agriculture sectors.
This is one example of how this type of plan is used and and at a financial planning meeting, we would advise if whole of life was appropriate to your needs.