Aegon claims to be the first company to offer this integrated trust process which limits the chance of delay and the potential for errors by doing this all at the same stage.
If a customer is eligible for free cover and the adviser uses Aegon’s integrated trust process, the free cover will be placed in trust. By doing this, should the customer die while Aegon was processing the application, any free cover wouldn’t add to the inheritance tax (IHT) liability.
Other key features of the Aegon WOL policy include:
- Built in flexible options – a range of guaranteed insurability options and a gift inter vivos conversion option – so cover can change with customer circumstances
- Joint life separation option – this means that if a policyholder was to divorce or dissolve a civil partnership, they could split the joint-policy into two single-life policies
The insurer said writing life policies in trust, which reduces the amount of tax paid from an estate in inheritance tax, is only done in 10% of cases across the industry at the moment.
Dougy Grant, protection director at Aegon, said there was £530m paid unnecessarily each year in IHT and Aegon wanted to help its customers to change that statistic.
Grant added: “From an adviser point of view, we’re clear on our target market – slightly older customers whose dependents will have an IHT liability on their death, people with a property worth more than the nil rate band. As it’s designed for that target market, to offset that liability, we’ve maximised the likelihood of it being written in trust.”