Aegon UK has launched a whole of life protection policy designed to provide money to help cover an inheritance tax (IHT) bill payable on a customer’s estate when they die.

The insurer launched the product after asking customers aged over 40 from the Aegon Customer Panel what they knew about IHT and what measures they had in place to mitigate the IHT liabilities of their estates.

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Of those who responded, the majority, 87.5%, were aware that the government could take 40% of inheritance on death. However, only 29% of those surveyed had taken measures to mitigate their IHT liability.

Given these findings, Aegon’s whole of life protection policy can be placed in a discretionary trust to enable customers to protect and pass their wealth on to the next generation.
Among the product’s other features is a joint life separation option, which means that if a policyholder was to divorce or dissolve a civil partnership, they could split the joint-policy into two single-life policies.

Dougy Grant, protection director at Aegon UK, said: "Inheritance tax can cost those left behind thousands of pounds worth of additional heartache, yet there are ways to make provisions for this – such as writing life policies in trust – which we estimate is being done in only 10% of cases. Our whole of life policy is one way to address this. It helps to reduce the amount of tax that would have to be paid from the estate, so more can be passed on to the beneficiaries."

The Aegon customer panel survey was carried out online and there were 120 respondents in total. Fieldwork was undertaken between 29 September and 3 October 2014.

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