Royal London 360° has launched a new Split Trust for use with its whole of life international* protection product, LifePlan.
The Split Trust allows a UK domiciled LifePlan policyholder, who has selected both Critical Illness and Life Cover, to have access to their Critical Illness benefit whilst ensuring that the Life Cover does not fall into their taxable estate for UK Inheritance Tax (UK IHT) purposes.
How does the Split Trust work?
Upon the diagnosis of a Critical Illness, and subject to surviving the diagnosis by 30 days, the trustees will advance the Critical Illness Cover to the life assured for them to use as they see fit. The Life Cover element of LifePlan will remain in trust and will not be taken into account for UK IHT valuation purposes on their death.
Where the life assured does not survive the diagnosis of the critical illness by 30 days, the Critical Illness benefit is not paid, remains in trust and, more importantly, outside of their UK IHT assessable estate.
LifePlan’s comprehensive range of features make it one of the most competitive international protection products on the market. It aims to pay a cash sum on the death of the life assured, or upon diagnosis of a terminal illness. Its core benefit is Primary Life Cover, which is available up to the value of USD7,500,000 (or currency equivalent).
Term benefits are available until aged 80, and Long-term care is a standard feature. It is available in four currencies – Sterling, Dollars, Euros or Japanese Yen.
The LifePlan Split Trust was developed by Neil Chadwick, Technical Marketing Manager at Royal London 360°, who commented: “The features of this trust are not rocket science – they just make sense for advisers and investors alike when undertaking this type of planning. Like all of our product developments, we listened to what our customers were looking for and developed it for them. The Split Trust is a practical estate planning solution and I am confident will prove very popular.”
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