Frequently Asked Questions

Do I need to keep making payments for the policy once it’s in trust?

Yes, although the policy is in trust, payments still need to be made to keep the policy live. Nothing has changed in that regards as the policy still pays a benefit to someone, normally a family member or loved one, so payments need to be maintained. You no longer own the policy as it is the property of the trust which will ultimately distribute the policy proceeds to the beneficiary(ies). If you are no longer able to make the payments the trustees or a beneficiary(ies) may be able to.

Does a solicitor need to write a trust for me?

No - trusts for life insurance are relatively simple and we provide a range of draft trusts for you to choose from. If you have questions on these draft trusts you should seek professional advice – you may have to pay for the advice you receive.

Where do I get advice from if I’m not sure?

These pages are intended to provide an overview of trusts and what they can do for you and what their main limitations are. Trusts may not be suitable for all circumstances, so if you are unsure, you should seek professional help from a solicitor or your adviser - you may have to pay for the advice you receive.

Will a trust mean that Inheritance Tax won’t apply?

One of the main benefits of putting a life insurance policy in trust is it won’t normally be included in your estate for Inheritance Tax purposes. Also for most life insurance policies the payments you make will usually be exempt transfers, because the payments are usually made from your normal income/expenditure. Exempt transfers are not subject to Inheritance Tax.

If you’re concerned about Inheritance Tax, you should speak to your financial adviser or a solicitor before you put your policy in trust. Bear in mind that you may have to pay for the advice you receive.

Can I change my mind later and remove a trust?

No – not normally. Once you’ve placed a policy in trust it is then owned by the trust and not you. As it’s an irrevocable act you cannot change your mind later.

What happens if the trustees need to make a claim on a policy that’s in trust?

The trustees should contact us as soon as possible to let us know that they’ll be making a claim. They can contact us in writing, or by phone or fax. For details of how best to contact us, visit our contact us section.

We’ll let the trustees know what documents we’ll need from them at the time. We may ask them for the original trust deed, so it’s really important that you keep this in a safe place, for example with your policy documents.

More details about how to claim and what documents we’ll need can be found in the policy conditions.

Once we agree to pay the claim, we’ll usually pay the proceeds to the trustees. It’s then their responsibility to make sure that the money is paid to the beneficiary(ies), or managed on their behalf.

If you are unsure if putting your policy into trust is right for you, or you’re not sure which trust to choose, you should seek professional help from a solicitor or your financial adviser – you may have to pay for the advice you receive.