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Life Insurance for IHT
If you are thinking about cost effective way to cover the pottential Inheritance Tax Liability (IHT), then life insurance is a really good option to consider.
What is Life Insurance for IHT Planning?
Life insurance for Inheritance Tax (IHT) planning is a strategic financial tool that helps your family avoid large tax liabilities when you pass away. If your estate is above the IHT threshold (currently £325,000 in the UK — or more with certain allowances), anything over that is taxed at 40%. A properly structured life insurance policy can cover that tax bill — so your family don’t have to sell property, businesses, or investments to pay HMRC.
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Why is this type of cover important?
Your family shouldn’t have to sell the house to pay the taxman.
Most HNW families have wealth tied up in property or business shares. When you die, your estate can be hit with a large tax bill — often due within six months. Life insurance can pay that bill directly, so your loved ones inherit assets, not admin headaches.
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Think of it as an IHT buffer: you’ve worked hard to build something. You want it to pass on cleanly. A life policy placed in trust ensures quick payout, tax efficiency, and control over how and when the money is used.
It protects your legacy — not just your life.
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Even a large IHT policy can be surprisingly affordable when compared to the tax burden it offsets. And with the right advice, we can structure it outside your estate, so it doesn’t increase your IHT exposure further.
It's often cheaper than you think.
FAQ
A will decides who gets what. Life insurance ensures there’s cash to pay the tax — so they can actually receive it.
This is where you should consider speaking with wealth and tax advisers, who can help you decide the right cover amount. Once you know the answer, get in touch and we will find the cover you need.
Yes — and you should. It helps the payout to stay outside your estate (in most scenarios), avoids delays and extra tax, and gives you control over how it’s used.
We offer both fixed and reviewable premium structures — depending on your age, health, and cover amount.
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