The Intermediary –- May 2026 - Flipbook - Page 19
P RO T E C T I O N
In focus
While the premiums can be
relatively expensive compared to
those of a Level Term policy, they
will still generally count as ‘normal
expenditure out of income’ and will
therefore reduce the clients’ IHT
liability over time, with the balance of
the sum assured over the IHT liability
remaining at death providing a legacy
gi for the beneficiaries.
Convertible Term
A Convertible Term policy can
be converted to WOL by a certain
age with no further underwriting
Life insurance in trust
[provides] certainty and
liquidity for the personal
representatives to be able
to quickly settle any IHT”
required. It is only available on a
SL or joint-life first death (JLFD)
basis; however, a JLFD policy can be
converted to a JLSD WOL policy, so can
be used to cover future IHT liabilities.
It is popular for younger, higherearning clients, who need mortgage
and family cover now on a JLFD basis,
but who expect to have an IHT liability
in the years to come. They can convert
to JLSD WOL when the mortgage is
paid off, and the children grown up.
The FCA’s Consumer Duty
reinforces the responsibility for
advisers to anticipate foreseeable harm
and deliver good long-term outcomes
for customers. It is important for
advisers to ensure that the valuable
role protection has to offer in effective
estate planning is routinely discussed
in client reviews. ●
May 2026 | The Intermediary
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