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The Insurance Series: Why life insurance should be in trust

In the second instalment of our Insurance Series we take a closer look at life insurance. It can be an extraordinary gift to your loved ones at a particularly difficult time. But with so many available options on the market, it’s often difficult to know what is best for your circumstances. In this month’s article we consider life insurance in more detail and focus on how putting it into trust can be beneficial. Keep in mind that you can also get in touch with any one of our team of independent financial advisers for advice and assistance – we’re a click away on www.plutuswealth.com.

What is life insurance?

Life insurance provides financial cover for your dependents when you die. Its purpose is to make money available so that debts and expenses (such as mortgage payments and living costs) are covered after you pass, particularly if others rely on your income. It can take the form of a lump sum payment or can be paid in instalments.

There are a number of different types of life insurance cover:

For other types of insurance cover, such as critical illness or income protection, have a look at last month’s article for more details.

Why put it in trust?

Once you have decided which option is best for you, the next step is to consider how to set up the policy. One of the things we always recommend to clients is to consider putting their life insurance policy into trust. This is also known as ‘writing it in trust’.

A trust is a way to set aside something for a particular beneficiary. This could be a spouse or child/children, and can help to determine how and when it is paid out when you die. There are three key benefits to writing your insurance policy in trust:

Does it cost more?

No, it does not. There is no additional cost to writing your policy in trust, which is why it is surprising that so few people do it. Research shows that only 6% of policies are written in trust. If the option is not offered to you when taking out the policy, either ask for it or talk to an independent financial adviser. They can also help you to transfer an existing policy into trust.

Key considerations when thinking about life insurance

If you are considering taking out a life insurance policy, here are a few things to keep in mind to help you decide on the best option for you:

Let us help

If you are considering some form of life insurance policy or want to know more about the benefits of writing one you have in trust, get in touch with us at Plutus Wealth. All you need to do is take the first step by giving us a call on 020 7871 5200 or dropping us a line at info@plutuswealth.com. Our team of independent financial advisers has the skills, knowledge and experience to help you get the best policy for your circumstances, at the right price for you.

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