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Old Mutual Wealth: Have you ever had a joint life application declined because one client's health makes them uninsurable?

IHT planning for Financial Advisers and Paraplanners

18 Nov 2019

Old Mutual Wealth: Have you ever had a joint life application declined because one client's health makes them uninsurable?

If the plan was on a last death basis for IHT planning, that probably left you with a dilemma: how do you ensure the money is paid out to the beneficiaries at the correct time?

You could play the odds and apply for a single life policy for just the insurable life. But, if they were to die first the proceeds would be paid out before the IHT became due. That leaves the trustees with some headaches: 

  • Invest it or leave it in cash? Either way could lead to a shortfall when the IHT is due.
  • Place it into a discretionary trust? The trustees will be responsible for ensuring any 10-year periodic or exit charges are paid.
  • Pay it to the beneficiaries? They also face dilemmas of what to do with the money, plus the risk of creating or increasing their own IHT liability.

Old Mutual Wealth’s solution is simple

If one life is declined Old Mutual Wealth could still offer a joint life last death policy, either guaranteed whole life or rolling term; we simply base the premium on the single life rates for the healthier life.  

That way your client’s beneficiaries get the right money at the right time and no-one gets a headache.

Find out more here

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