Malcolm Finney explains the use of term insurance in funding inheritance tax liabilities.
Life policies may take many forms including whole life, endowment, term, joint life first death, last survivor, child’s deferred, mortgage protection, and family income.
This article concentrates on so-called temporary insurance, more commonly referred to as ‘term insurance’.
What is term insurance?
Term insurance provides for a lump sum to be paid in the event of the death of the life insured if death occurs within an agreed period of time or by a certain age. In the event that the life insured does not die within this period (or before a certain age), no lump sum is paid out and the policy terminates.
Term insurance is often used for mortgage
