Section 72 Whole of Life

A Section 72 policy is a Whole of Life insurance policy that an individual or a couple can take out in order to pay out a lump cum benefit (Sum Assured) on death. These policies are most suitable for individuals aged between 50 - 70.

The Policyholder(s) will select a fixed Sum Assured for a fixed (non reviewable) monthly premium for life.

Favourable Tax Treatment:

• The distinct advantage to aSection 72 policy is that the proceeds of the policy can ultimately be tax-free to the beneficiaries, as long as the proceeds are used to pay Inheritance Tax.

• With current Inheritance tax rates of 33%, this is a big future saving and is important for inter-generational wealth preservation

• Section 72 Policies also cover off the 30% Special Tax on ARF distributions (by adult children over 21)

• For couples, on the assumption that their Wills leave all of their assets to each other, the Policy would be taken out on a Joint Life Last Survivor basis, as there is no inter-spousal inheritance tax

Taking out a Section 72 Policy:

• The policyholder(s) would have to complete a health questionnaire and undergo a medical; the attractive premiums don’t apply if the Life Insurance company ‘loads’ the premium for health reasons. Insurance Companies may also refuse to cover certain applicants based on pre-existing conditions.

The main factors that impact on Section 72 premium pricing are as follows:

• Your Age(s)

• Smoker Status

• General Health

Compass Private Wealth have agencies with all the main Insurance Companies who provide Section 72 Cover and can arrange the most suitable Sum Assured and Provider for our clients.