Royal London Launches Joint Life Second Death Life Cover

Cost-Effective Estate Planning Solution for High-Value Estates

Royal London has introduced a new option for life cover in its Personal Menu Plan. This option is designed for joint life policies. It helps clients plan their estates and handle costs connected to inheritance tax. Additionally, this choice is cheaper than regular whole of life insurance.

This term life cover is designed for rich people and their families. They need it to deal with big inheritance tax bills. This is really important now. House prices are rising, but the tax thresholds remain the same.

What Is Joint Life Second Death Life Cover?

Joint life second death life cover pays money to the beneficiaries when the second person passes away or is diagnosed with a terminal illness. This payment happens during the term of the cover. The insurance will last until the people covered turn 90 years old.

Now, advisers can offer this choice as a cheaper option in term policies. Before, it was only in Royal London’s whole of life plan.

Why Is It Important for IHT Planning?

Growing IHT Liabilities in the UK

The Office for Budget Responsibility says that by the end of the decade, almost one in ten deaths will result in inheritance tax. This increase happens for several reasons:

• The nil rate band stays the same because tax thresholds are not changing.
• House prices are going up, so more estates are now in the taxable bracket.
• Starting in April 2027, pension death benefits will count as part of estates for IHT.

For people over 40 who have a lot of assets but not much cash, this coverage can help lessen the stress from growing concerns about inheritance tax.

How Does the Gifting Option Work?

One key part of Royal London’s new life cover is the gifting option. This lets people give lifetime gifts to their families. It also makes sure that those gifts are protected.

Protecting Assets with Gift Inter Vivos Cover

• A part of the sum assured can go into a different gift inter vivos policy.
• This protects a person from possible IHT costs if they die within seven years of giving the asset.
• After seven years, the gift is IHT-free.

You don’t have to do medical checks again with this option. It gives you flexibility and peace of mind.

A Cost-Effective Alternative to Whole of Life Cover

Many people think whole of life policies are a good way to plan for inheritance tax (IHT). But, they can be expensive. Royal London offers a second death life cover option that includes:

• A less expensive choice for people who might receive an IHT bill.
• Security for a specific term of the cover that stops at age 90.

This is a good option for people with large properties. It works well for those who cannot pay for a whole of life policy.

What Experts Are Saying

Jennifer Gilchrist is a Protection Expert at Royal London. She provided helpful information.

Gilchrist said that the product is available now.

Ian McKenna started Protection Guru. He felt good about this change.

Who Can Benefit from Joint Life Second Death Cover?

This product primarily targets:

• People who are over 40 years of age and have good wealth.
• Families that hold substantial assets but do not have much cash.
• Individuals who want affordable ways to manage possible IHT liabilities.

It is particularly suitable for:

• Use the gifting option to manage your gifted assets.
• Many people want to reduce their IHT due without having to pay life insurance premiums.

Estate Planning and IHT Trends in the UK

Rising House Prices and Frozen Thresholds

The nil rate band has stayed at £325,000 since 2009. In these years, house prices have increased a lot. Because of this rise, even smaller estates now face inheritance tax liability.

Changes from the Autumn Budget

The recent Autumn Budget brought changes such as:

• Starting in April 2027, pension death benefits will count towards the total value of estates for inheritance tax (IHT).
• Families will have to think carefully about their estate value.

The changes coming soon will likely raise the need for IHT planning solutions.

How Advisers Can Use the New Royal London Solution

Royal London has a new service. This service helps independent financial advisers (IFAs) create flexible and customised solutions.

• A good option instead of whole of life insurance for people with special family circumstances.
• You can make lifetime gifts wisely to keep your assets safe.
• A smart choice for those in reasonable health who have a clear plan about inheritance tax.

Final Thoughts from Royal London

Fiona Wynn works with the Protection Proposition at Royal London.

Key Features of Royal London’s Joint Life Second Death Life Cover

How Do Inheritance Tax Bills Affect Estate Planning?

The rising number of deaths facing inheritance tax (IHT) shows that smart financial planning is important. Since the tax thresholds are frozen and property values are going up, more of your estate may have to deal with an IHT bill.

Many people use life assurance and whole of life products to help with potential IHT liabilities. Advisers usually suggest these policies so that part of the money can be used to pay taxes. Using tools like discretionary trusts and planning for the years of the gift can help lower these liabilities during a person’s life.

Choosing how much cover you need depends on several personal factors. This includes your life expectancy, the value of your estate, and the needs of any specific person involved.

FAQs About Royal London Joint Life Second Death Cover