The recently over 60’s are the post-war baby boomers. Their insurance needs are very different from that of a young family or someone just starting out in their first job.
A typical 60 something couple will have raised their family, finished paying off their mortgage and are into or nearing retirement. More and more of this age group of people spend part of their year abroad or maybe are planning to move to the sunshine on a permanent basis.
Maybe it would be a good idea to assess their insurance needs at this stage in their lives. Something that is almost certain to crop up is the worrying matter of inheritance tax. House prices have risen considerably over the past years and the family home that suited their lifestyle some years ago will probably be worth an amount approaching or over the inheritance tax limit.
Even if they downsize their property, they may invest in something like a holiday home and the actual capital is still there.
Inheritance tax is charged on taxable estates with a high value and this amount rises annually .
To work out the value of their estate, they will need to take the value of their home, savings, investments, life insurance policies, any business interests and any other assets which they have accumulated. When the total of this has been reached, any liabilities will need to be deducted. Typically this will be any mortgage outstanding, loans and other debts.
The remaining figure, less the amount exempt from Inheritance Tax is the one that Inheritance tax will be calculated from.
Inheritance tax would be charge on the death of the second partner. There is no inheritance tax between spouses. The couple would be advised to take some specialist advice at this stage, but a solution could well be to take out some whole-of-life insurance cover. An amount that would cover the estimated inheritance tax bill would relieve their beneficiaries of any worries when the inevitable time comes. The policy must be written “in trust” and the result will be that the payout will not be counted as part of the estate. By using this important provision, there should be no delay in the payment of the policy to beneficiaries.
Most policies designed to help with inheritance tax dues are investment linked and offered on a re-viewable basis. The plan will be reviewed at five or maybe ten yearly intervals. If the investment part of the plan has not performed as hoped, then the cost of the premium could rise and our couple need to be aware of this.
Peace of mind, a reason to smile. Keepsake.