Taxbriefs Commentary Library

Protection sales opportunity from the Autumn Statement

Danby Bloch, 10 Dec 2012


 

The cut in the lifetime allowance to £1.25 million from April 2014 just announced in the 2012 Autumn statement will have a major impact on the need for relevant life policies. Advisers and their clients sometimes forget that death benefits that exceed the lifetime allowance are potentially subject to tax penalties. Of course, any excess death benefits can be paid out as taxable dependants’ pensions – but most people prefer a tax free lump sum. And that’s just one reason why relevant life policies should be growing rapidly in popularity in 2013.

It is hard to understand why more advisers aren’t making the most of this opportunity to sell relevant life policies. After all, the employer’s premiums qualify for tax relief and aren’t a taxable benefit for the director or employee, and the premiums and death benefits fall outside the registered pensions tax regime. Virtually every director and senior executive should have one.

If there is to be a renaissance in protection insurance, Life and Health Insurance – The Adviser’s Guide  has never been more timely. Quite simply it is the essential guide to life and health protection. It provides a clear, simple but thorough guide to the key aspects of protection insurance and other forms of life assurance, covering the practical, legal and financial issues around life and health insurance. When should you use income protection insurance and when is critical illness cover more appropriate? What are the various ways to set up partnership insurance arrangements and how are the premiums and proceeds of a policy taxed? All this and much more. There's even a full section on the taxation of the proceeds of onshore and offshore life assurance bonds.

 


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Danby Bloch

Editorial Director, Taxbriefs

Danby Bloch is the editorial director of Taxbriefs, chairman of city-based IFAs, Helm Godfrey and director of Nucleus, an independent wrap provider.

Over a period of more than 40 years, Danby has established himself as one of the industry's leading thinkers and  is a respected author, lecturer and trainer on tax and financial planning.

 

 

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