It seems to be a little known fact that in the last budget, legislation was introduced which has created a tax loophole on a certain type of life insurance. We gather that early indications point to the fact that, for 50% of people, the most economical solution for their insurance needs may be a Pensions Life Insurance Policy.
The policy won’t be suitable for everyone as there are various qualifying aspects of the insurance, but there are certainly tax savings to be made for some people.
The policies have a number of names, sometimes referred to as Pensions Life Insurance and we have seen Level Term Pensions Life Insurance used. The use of the word pension is a little misleading. They are not actually anything to do with pensions. They don’t provide a pension and it’s not necessary to have a pension in place already. It’s a small part of an extensive change in tax legislation relating mainly to pensions and inheritance tax.
Pensions Life Insurance will pay out a lump sum on death of the policyholder or diagnosis of a terminal illness, resulting in death within a year. There is no provision for joint policy holders, so each person participating has to have their own cover. Critical illness cover is a separate issue and cannot be included in the policy. Read the rest of this entry »