Whole-of-Life Insurance for Inheritance Tax Planning

IHT COVER ESTIMATOR (QUICK GUIDE)

A simple, indicative tool. Actual requirements depend on your full circumstances and any future tax changes.

Property + savings + investments + other assets
Outstanding mortgage, loans, funeral costs, etc.
Default currently £325,000
If passing a qualifying home to direct descendants

ESTIMATED COVER NEED

£40,000

Based on 40% of estimated taxable estate (after allowances & debts).

✔ Consider setting the policy in trust so proceeds bypass your estate and are available quickly to pay IHT.

This is a simplified guide. It doesn’t account for tapering, gifts (PETs/CLTs), Business Relief, or complex estates. We’ll refine this with you.

Protect More of Your Estate from Inheritance Tax

Use specialist life cover and trust planning to help your family settle Inheritance Tax (IHT) quickly—without forced sales of the home, investments or the family business.

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Why Use Life Cover for IHT?

  • Guaranteed payout: Provides liquidity precisely when HMRC requires payment.
  • Usually outside your estate: When written in trust, proceeds are typically available faster.
  • Preserve assets: Avoid distress sales of property, portfolios or company shares.
  • Tailored approach: Single life or joint-life second-death—commonly used for IHT planning.

Example: Protecting a £1.2 Million Estate

John and Sarah own a home and investments worth £1.2m. After allowances, their estate faces an estimated £140,000 IHT bill.

  • They take a joint-life, second-death whole-of-life policy for £150,000, written in trust.
  • On second death, the policy pays trustees directly—no probate delays—who use it to settle IHT.
  • Their assets pass to beneficiaries without forced sales to meet HMRC deadlines.

Bought a Policy in the Last 5 Years?

We may be able to beat your current premium or improve terms. Underwriting and pricing change over time—especially on larger cases—so a quick market review can yield meaningful savings.

Review My Existing Policy

How We Help — End-to-End Service

IHT estimate

We map your estate, allowances and likely IHT exposure.

Cover design

Sum assured to match the target IHT; single or joint (second death) options.

Market comparison

Aviva, Legal & General, Zurich, AIG, Vitality, Royal London and more.

Trust setup

We help arrange the right trust so funds are accessible quickly.

Ongoing reviews

Keep cover aligned with estate changes and legislative updates.

Placing Your Policy in Trust

Writing your policy in trust usually means the proceeds fall outside your estate for IHT purposes and can be paid directly to trustees—helping avoid probate delays. Common options include discretionary, bare and split trusts. We’ll explain the differences and coordinate signatures with you and your trustees.

What Affects the Cost of Whole-of-Life Cover?

Amount of cover (IHT target) Age & medical history Smoker status Single vs. joint (2nd death) Fixed vs. reviewable premiums Indexation options Optional riders / trust structure

Larger estates may require higher sums assured; even small pricing improvements can save thousands over time.

Whole-of-Life vs. Term Life — At a Glance

Cover Type Duration Payout Guarantee Common Use
Term Life Fixed term (e.g., 20 years) If death occurs within term Mortgage/family protection
Whole-of-Life Lifetime Guaranteed IHT & estate planning
“Lightblue made the process effortless. Our joint plan now fully covers the potential IHT bill—at a lower premium than we were paying.”
— Mr & Mrs P, Essex

FAQs

Do I need a trust?
For IHT planning, a trust is usually recommended so proceeds are paid outside your estate and available quickly. We’ll help you select and arrange the right option.
How much cover should I choose?
We align the sum assured to the estimated IHT after allowances. You can index the benefit to keep pace with changes in estate value.
Is medical underwriting required?
Larger cases typically involve medical questions and sometimes nurse screenings. Strong applications can secure materially better pricing.
Can I replace my existing plan?
Often, yes. We’ll compare like-for-like. If we can’t beat your price or improve terms, we’ll tell you.
Do you provide tax advice?
We provide regulated financial advice on protection and trusts guidance. We do not provide tax advice; for complex tax matters we can liaise with your accountant or solicitor.

Request Bespoke Quotes & IHT Review

Speak to an FCA-authorised adviser. No obligation. High-value and complex cases welcome.

Prefer to talk? Call 01702 820 771 (Mon–Fri).

We compare leading UK providers: Aviva, Legal & General, Zurich, AIG, Vitality, Royal London and others.

Advice includes guidance on using trusts; we do not provide tax advice. For complex tax matters, we’ll liaise with your accountant/solicitor.

Authorised and regulated by the Financial Conduct Authority. Lightblue Online is an Appointed Representative of Lightblue UK Ltd (FCA Reg No. 530882). All quotes are subject to underwriting. Terms & conditions apply.