Life Insurance to Cover Inheritance Tax Protect your estate from the 40% bill

A whole of life policy written in trust can pay your family's inheritance tax bill, so more of your estate passes to the people you love. A broker will call with tailored quotes.

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How Life Insurance Covers Inheritance Tax

Whole of life cover gives your family the funds to settle the bill without selling assets.

Covers the 40% Bill

Inheritance tax is charged at 40% on the part of your estate above the threshold. A guaranteed payout gives your family the cash to pay it without selling the family home.

Written in Trust

Placing the policy in trust keeps the payout outside your estate, so it is not itself taxed and reaches your family faster.

Guaranteed Lifetime Payout

Unlike term cover that can expire, whole of life guarantees a payout whenever you die, so the funds are there whenever the bill falls due.

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How It Works

Getting insurance quotes is simple. Here's how the process works.

Complete the Form

Answer a few simple questions about yourself and the level of cover you're looking for. It only takes a couple of minutes.

Receive a Callback

A specialist broker will call you back to discuss your requirements and answer any questions you may have.

Compare Your Options

The broker will present quotes from leading insurers so you can compare options and choose the cover that's right for you. There's no obligation to proceed.

Whole of Life vs Term Life for Inheritance Tax

Which cover suits an inheritance tax liability.

Feature	Whole of Life	Term Life Insurance
Duration	Lifetime — never expires	Fixed term (10-40 years)
Pays the IHT bill	Yes, whenever you die	Only if you die during the term
Can be written in trust	Yes — keeps the payout outside your estate	Yes
Best for	Covering a known future inheritance tax bill	Temporary protection during the term

A broker will call to discuss which option suits your estate.

Inheritance Tax Life Insurance FAQs

Common questions about covering an inheritance tax bill.

A whole of life policy pays out a guaranteed lump sum when you die. Written in trust, that money goes straight to your family and can be used to pay the inheritance tax bill, so they don't have to sell the home or other assets to settle it.

Writing the policy in trust keeps the payout outside your estate. That means it isn't added to the value being taxed, and your family usually receives it faster because it does not have to wait for probate.

A common approach is to estimate 40% of the value of your estate above the inheritance tax threshold. A broker can talk through the figures and arrange quotes for the right amount of cover.

When the policy is written in trust, the payout normally falls outside your estate and is not subject to inheritance tax. Tax treatment depends on your circumstances and the rules can change.

Yes. After you request a quote, a broker will call to discuss your estate and arrange tailored quotes from leading UK insurers. Quotes are not completed online.