Thanks to EU edicts to eliminate “discrimination” by “gender neutralising”, the cost of life insurance is likely to increase significantly from 31 December 2012. Insurers will not be able to set differential premiums for men and women, based on life expectancy and health, as they have done for hundreds of years. This may increase the cost of protection cover for women in particular, while for men the cost of income protection may also increase.
If you have been thinking you should take out some cover for the family (perhaps because of impending marriage or the arrival of children) or are contemplating some Inheritance Tax planning involving a significant lifetime gift needing protection for 7 years, maybe you should do something about it sooner than later?
Life insurance provides basic family protection for younger parents until children have ceased to be a financial burden, and is regularly used to cover a mortgage liability. It can be used to protect a divorced spouse from the early death of the main income earner who is providing maintenance payments for spouse and/or children.
Some employers provide free cover for staff (eg 4 times salary) as a benefit which can pass to beneficiaries free of Inheritance Tax (IHT) but the self-employed in particular need to look after themselves.
For those aged up to around 70 in good health, life insurance can play an important part in estate planning, for example to cover the risk of death within 7 years of making a gift liable to Inheritance Tax.
Stone King is not authorised to give advice of this kind as we are not regulated by the Financial Services Authority, but if you do not have an existing Financial Adviser (IFA) we can provide generic advice in the context of IHT and succession planning and can introduce you to an IFA.