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Is Your Policy in Trust?

This guide was last updated 15 April 2024

In the world of financial planning, insurance is your safety net. Whether it’s life insurance, critical illness cover, or income protection, these policies offer peace of mind when life throws curveballs. But here’s the thing – there’s an extra layer of protection you might be missing out on that could make a significant difference for your loved ones: putting your insurance policy into what’s known as a Trust.

At Coreco, we’re not just about getting you the best mortgage deals; we’re all about making sure you’re financially covered from every angle. So, let’s talk about why it’s a good idea to put your insurance policies into Trust and what it means for yourself and your loved ones.

Breaking It Down: What’s a Trust?

Think of a Trust as a legal arrangement that allows you (the Donor) to transfer your insurance policy to someone you trust (the Trustee) for the benefit of your loved ones (the Beneficiaries). By putting your insurance policy into a Trust, you’re essentially ensuring that the money goes straight to your family without getting stuck in complicated legal processes (such as probate) or risking unnecessary taxes.

Why Bother Putting Your Insurance Policy in Trust?

  1. Quick Access to Money:

Without a valid Trust, your insurance payout might get caught up in the probate system, delaying the much-needed cash for your family. Putting your policy into Trust speeds up the process, making sure your loved ones get the money when they need it.

  1. Shielding from Taxes:

Depending on the size of your estate and assets, your insurance payout could be hit with inheritance tax. However, placing your policy in trust could help avoid this, ensuring that your family receives the entire amount you intended for them.

For advice around inheritance and trusts, you should seek expert legal advice.

  1. You Call the Shots:

With a Trust, you get to decide how and when your family gets the insurance money. Whether it’s for immediate help or future goals like education or clearing the mortgage, you’re in control, making sure your wishes are followed.

  1. Keep Things Private:

Unlike Wills, Trust documents are completely private. They don’t go on public records, so your financial matters stay confidential. It’s a way to protect your family from unnecessary attention during sensitive times.

How Can Coreco Help?

Getting into Trusts and protection policies might seem a bit overwhelming, but you don’t have to figure it out alone. The Coreco protection team is here to guide you through the process. We’ll get to know your financial situation and help come up with a plan that most suits your needs.

Whilst the purpose of this guide is to provide an overview of the nature of trusts it does not (and is not intended to) comprise legal advice. If you have any concerns about the consequences and obligations that may arise, you are encouraged to obtain independent legal advice

    Savannah Dewhirst

    Written by Savannah Dewhirst

    Savannah joined Coreco in 2020, where she became part of the Client Services Team. After a year of Client Services, Savannah expressed an interest in Social Media and wanted to transform Coreco’ s socials. Savannah then became Coreco's Social Media Queen and fulfilled the role until most recently becoming Marketing Executive. Savannah also won Best Use of Social Media Award in the 2022 Mortgage Industry Marketing Awards!

    Read more posts by Savannah