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A Trust is a legal agreement where your assets, including your life insurance policy, are managed and distributed to your beneficiaries by one or more trustees. There are various types of Trusts, but they all aim to accomplish the same goal. It is not mandatory to create a Trust when taking out life insurance, but it has numerous benefits.

 

Placing your life insurance policy in Trust removes it from your Estate, resulting in the avoidance of Probate. This accelerates the process of your beneficiaries receiving the life insurance payout, which can be crucial in urgent situations such as paying for a funeral or mortgage payments. Furthermore, creating a Trust provides greater flexibility in choosing who will receive the payout and how it can be spent. For example, a trustee can manage the funds intended for a child until they reach the age of 18. If you do not create a Trust, the payout will likely go to your next of kin, regardless of your intentions.

Additionally, placing your life insurance policy in Trust exempts it from inheritance tax calculation, ensuring that your loved ones receive the full payout intended for them. However, the rules of inheritance tax are subject to change, and professional advice should be sought regarding taxes.

It is essential to note that Trust planning and inheritance tax planning are not regulated by the Financial Conduct Authority.

• When a person dies, they typically leave behind various assets, such as property, bank accounts, investments, vehicles, and personal belongings, collectively known as their Legal Estate. If the value of this estate exceeds a certain threshold set by the UK  Government, it may be subject to inheritance tax (IHT). Without a Trust, a life insurance payout would be paid to the deceased person’s bank account or personal representative, which would be included in their estate and could push it over the IHT threshold.

  However, if a life insurance policy is placed in Trust, its value is usually not considered part of the estate and would not be subject to probate or inheritance tax. This means that the payout could reach beneficiaries faster and potentially save them thousands of pounds.

Life insurance payouts are not taxed as income. However, if the payout is part of your Estate, your beneficiaries may be liable to pay inheritance tax if your Estate’s total value exceeds a specific threshold.

A Trust agreement is a legal arrangement that allows you to transfer your assets to your chosen trustees and beneficiaries. One of the advantages of putting your life insurance policy into a Trust is the potential tax benefit for estate planning purposes.

 

There are different types of Trust to choose from, depending on your needs and the beneficiaries you want to include. It’s essential to select the right one to ensure your peace of mind.

If you buy a life insurance policy through Protection Heroes, we offer a free Trust service to help you set up a Trust. Within six weeks of purchasing your policy, you’ll be
asked to schedule a call with our Trust team. They will guide you through the process of selecting the right Trust type, picking your trustees and beneficiaries, and filling out the required forms.

The Trust process is quick and easy, and once your policy is placed in Trust, you can relax knowing that your chosen trustee(s) will receive the payout and distribute it to your beneficiaries.

Note that Trust planning and inheritance tax planning are not regulated by the Financial Conduct Authority

The medical history of your immediate family members can impact your life insurance application. If any of your direct family members were diagnosed with cancer or heart disease before the age of 60, it could suggest a hereditary condition that might increase the perceived risk to insurers. Insurers may ask about other health conditions in your family history as well, so it’s best to be prepared to answer these questions during the application process. Having a negative hereditary trait doesn’t automatically mean that you won’t be eligible for life insurance, but it might affect your premium prices. It’s important to disclose all relevant medical information during the application process, as withholding any information could render any future claim invalid.

The purpose of life insurance is to provide a payout upon the policyholder’s death, although some policies may allow for an early payout if the policyholder has a terminal illness with less than a year to live. On the other hand, Critical Illness Cover is a policy that pays out upon diagnosis of a serious illness such as cancer, heart attack, or stroke. The payout from Critical Illness Cover can be used to assist during times when the policyholder may not be able to work. There are no restrictions on how the payout from a Critical Illness Cover policy can be used, similar to a life insurance payout.

Life insurance policies typically only provide a payout upon the policyholder’s death. However, some policies may also pay out early if the policyholder is diagnosed with a terminal illness and has less than 12 months to live. In the case of a severe stroke, such as Terminal Status Stroke, a life insurance policy may also pay out under the terminal illness clause, which could require palliative care and lead to death within months. The policy may also pay out if death occurs due to a stroke at any time, provided the policy is still active.

 

For strokes of lesser severity, a life insurance policy will not pay out while the policyholder is still alive, but will cover death caused by stroke as long as the policy is active. If someone is concerned about the financial impact of having a stroke, they may consider purchasing Critical Illness Cover. This insurance provides a payout upon diagnosis of a variety of illnesses, including stroke, and can provide financial assistance in the event of a serious health condition.

Although most mental health conditions do not necessarily disqualify you from getting life insurance, it is essential to consider that the decision to underwrite your application depends on the nature and severity of your condition. If your condition has worsened recently or you have attempted suicide in the last 12 months, you may not be eligible for coverage.

The British Heart Foundation reports that there are over 100,000 hospital admissions in the UK each year due to heart attacks, which equates to one every five minutes. In the unfortunate event that you pass away as a result of a heart attack, your life insurance policy should provide a payout.

 

For those who survive a heart attack, it can be difficult to return to work full time, and managing finances can become a struggle. If you want to protect your finances in the event of surviving a heart attack, you may consider Critical Illness Cover. This type of insurance is designed to pay out a lump sum of money upon diagnosis of various illnesses, including heart attacks. However, the severity of the heart attack may impact whether a payout is due.

We apologize if our attempts to contact you have been bothersome. We understand the importance of peace of mind for our customers and are dedicated to providing families with protection.

 

If you no longer wish to receive calls from us, you can inform one of our team members during a call and we will ensure that your number is not contacted again, unless you request a quote in the future. Alternatively, you can use our Opt Out Form to request that we stop contacting you.

Please be assured that we handle and process your data with utmost care and adhere to strict standards.

Protection Heroes is a broker that offers its services free of charge, meaning that there are no additional or upfront fees for using our service. The insurance provider you choose through introducer fees, so you won’t be billed at any point during the process compensates us.

 

As Multi Panel advised broker, we don’t favor any particular insurer or product. We are only provide you recommendations based on the information you have provided us to ensure the product you chose is according to your needs. It is imperative to ensure that the advice is given. Our commission is paid upfront, but if you choose to cancel your policy within a specific timeframe, we are required to pay it back. This motivates us to make sure you are satisfied with your policy and not pressured into buying something that doesn’t suit your needs.

Life insurance policies can be confusing due to the many options available, including policy types, policy term, level of cover, illness cover or funeral benefits, monthly costs, and the life insurance company you trust to handle payouts.

 

Choosing the right policy begins with selecting the policy type, with Level Term Life Insurance or Whole of Life Insurance being the most popular for Protect Line customers. The former provides protection for a specified period, while the latter guarantees a payout upon your death. The cost of Whole of Life is higher than Level Term due to the longer term of the cover. Other options include Over 50s Life Insurance or Joint Life Insurance.

The policy term, level of cover, and additional options are all
important considerations. The policy term depends on your individual circumstances and can be based on significant life events such as retirement age or mortgage repayment. The level of cover should be enough to cover your mortgage, funeral expenses, living expenses, credit card bills, and other expenses you may have. You may also consider options such as Critical Illness Insurance, which provides a lump sum payment if you are diagnosed with a serious illness.

Life insurance premiums are calculated based on various factors, including health, age, and policy type. It’s essential to select an affordable policy to avoid missing payments and losing your cover. Protection Heroes works with reputable insurers, providing extra benefits such as mental health counselling, funeral benefits, Smart health, virtual GP and annual health checks.

Protection Heroes is an advised life insurance broker, which means they would gather information and give you the best suitable advise according to your needs. Therefore, Protection Heroes would recommend the best life insurance, which suits your needs. Protection Heroes only works with major insurers and offers a 30 day money back guarantee.

The possibility of an insurance company going bankrupt can be concerning, especially if you have a life insurance policy with them. You may worry about what will happen to your policy and the premiums you have paid. However, it is highly unlikely that the insurer you choose will become insolvent. Protection Heroes life insurance panel comprises financially healthy and well capitalized companies that can pay out on any valid claim.

 

Furthermore, insurance regulators keep a close watch on the financial condition of insurance companies, and most providers are publicly traded, which increases transparency. If an insurance provider does run into financial difficulties, then its customer list is typically acquired by one or more companies in the insurance industry. This protects the consumer and ensures that insurance claims can still be made.

If an insurance firm goes bankrupt and no other company takes on the policies before or during insolvency proceedings, the Financial Services Compensations Scheme (FSCS) will ensure that your insurance policy is honored. So, you can rest assured that your loved ones will still have financial protection in the event of an insurance company’s bankruptcy.

The terms Life Insurance and Life Assurance are often used interchangeably, but there are slight differences between them depending on the context.

 

Typically, Life Insurance refers to a type of insurance that offers protection for a fixed term. At the end of the term, the policy no longer provides coverage. It is considered insurance because the payout is only made if the insured person passes away during the term of the policy.

On the other hand, Life Assurance usually refers to a policy that has no fixed term and is also known as a Whole of Life policy. It is considered assurance because the policy is guaranteed to pay out on the death of the insured person, which is an event that is certain to happen.

Life insurance premiums are determined by various factors, such as your age and medical history. Generally, younger and healthier individuals pay lower premiums as insurers base prices on the risk profile of the policyholder. Higher risk individuals such as those who are older or have certain medical conditions will have higher premiums.

 

Protection Heroes cannot influence the prices set by life insurance providers or their criteria for assessing medical conditions. However, they will work with you to advice the best policy and provider for your needs.

For those concerned about the impact of an illness or medical condition on their premiums, there is the option of exploring non medically underwritten policies if they are aged between 50 and 80. Although such policies may not offer as high a payout as medically underwritten policies, they do provide some level of protection.

There is a common misconception that life insurance policies do not pay out, but this is simply not true. According to data from the Association of British Insurers (ABI), 98% of protection insurance claims were paid in 2021, making life insurance one of the insurance products with the highest payout rates. The most common reason for a policy not paying out is due to non disclosure or lying on the insurance application, which is why it is crucial to be truthful and transparent when applying for life insurance. To ensure accuracy, working with a phone based broker such as Protection Heroes can help you consider all the necessary medical questions and reduce the likelihood of unintentionally misleading the insurer or omitting important information.

Life insurance policies do not cover intentional self harm, recklessness, or suicide within the initial 12 24 months of the policy. It’s important to read and understand the policy wording for each insurer’s specific terms and conditions. Non disclosure of important information during the application process can also invalidate the policy. For joint life insurance policies, the death of one person means the policy no longer applies to the surviving partner and they would need to reapply if they wanted to maintain coverage.

It is possible to have multiple life insurance policies, as long as you can afford to pay the monthly premiums. This can provide sufficient coverage for various stages of your life, and your beneficiaries can claim on all active policies in the event of your death. However, some insurance providers may question your motives and require evidence that your policies are appropriate for your situation, and that you can afford to pay multiple premiums. It is important to carefully weigh the pros and cons before deciding to take out multiple policies.