What else do you need to know?

sarahgibson • 28 Apr 2021

What cover will you need and how much will it cost?

This will depend on your own personal circumstances, but we can quickly help you calculate an appropriate level of cover by considering things like:

  • Your mortgage and/or any other outstanding loans
  • Your current income and your household
  • Any likely childcare needs if you or your partner were to die or suffer serious illness or injury

Clearly, the higher the level of cover you decide you need, the more it will cost. Your age, medical history and occupation are among the other factors that will have an impact on cost. However, most policies are extremely good value for money, and many people are surprised at how affordable putting cover in place can be.

Keeping your cover up-to-date

You should always review your level of protection insurance whenever there are significant changes in your life. Getting married or moving in with a partner, buying a home, having children or changing your job can all have an impact on your financial obligations. Even if your circumstances don’t change significantly, it can be worth reviewing your arrangements to see if you can find a more suitable policy. Having said that, it’s important to ensure the cover of any new policy meets your needs, and that you’re aware of any benefits you may lose compared to your existing policy.

The Financial Conduct Authority does not regulate Trust Advice. HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Writing your life insurance in trust

A trust is a legal document that allows you to specify what will happen to your money after your death. If your life insurance policy is written in trust, any sum assured will be paid to your trustees, who will ensure the funds are distributed to the correct beneficiaries. A life insurance policy that has been written in trust doesn’t form part of your legal estate, and is therefore not subject to Inheritance Tax, ensuring that more of your hard-earned money is passed on to your chosen beneficiaries. Life insurance companies also tend to pay the money out more quickly under a trust, making things easier financially for your beneficiaries.


Even if your partner is your beneficiary (and therefore the life insurance payment would be exempt from Inheritance Tax under current rules), it can be worth putting your life insurance in trust to ensure payment is made as quickly as possible. We can advise you on the benefits of placing your policy in trust and can even arrange it for you. There is normally no charge for arranging a trust if it is arranged when the policy is taken out.

Look beyond the price

It may be tempting simply to opt for the cheapest policy available. But it is important to bear in mind that whilst many products may look the same, there can be important differences between them that can be difficult to spot.

This is particularly important with serious and critical illness cover, and income protection insurance, where the cover available from different providers varies more significantly. Care should be taken to select a policy that is most suitable for your particular needs. We can help you make the right selection.