Life Insurance

sweet girl

Hey all, I was wondering if anyone could offer some advice, Myself and my boyf are hoping to take out a mortgage on house of €150 000. What i want to know is, what is the best type of life cover to take out? As far as I know if we take out a joint policy(which is cheaper) and one of us dies then the other has to pay 25% inheritance tax because we arent married,If we take out 2 policies and one of us dies then there is no inheritance tax. Am I right in saying this? im just curious to know what people usually do? Also should we take the serious illness cover too? We are both in our twenties, non smokers no health problems.

music.babe75

Would be interested in replies to this.

We took out a joint policy a couple of years ago and are not married. No-one ever mentioned about the inheritance tax!!!!!

Does it depend on what way the ownership of the house is e.g. if one of us dies it automatically goes to the other person and not into our estate to go to next of kin i.e. parents etc.

Any opinions?

gogo

With the exception of the family home, all assets of common law partners will be subject to inheritance tax, (tax free up to €20,740 in 2010), then at 25%.
But if at the time of death, your beneficiary is still living in the home, has done so for three years, considers it his sole dwelling, has no other dwelling, and will continue to live there (for at least 6 years) then the inheritance tax is exempt.

That said of he takes out a sole life policy on you,and you on him, the proceeds will be paid directly to you(or him), and there will be no tax libality as the proceeds did not go through your estate. This will not be the case with a joint or dual life policy.
Alternatively:
A specific type of life insurance, called a Section 60 policy, is designed to provide a tax-free lump sum to cover inheritance tax liabilities that may arise on your death.

You really need to sit down with a financial advisor and discuss this in detail, trust them, as they are legally obliged to provide you with the policy most suited to your needs.
On maternity leave at mo, so hopefully the above info still stands.(baby brain:p) Good Luck with the new house!

music.babe75

In our case, the life insurance will only pay off the mortgage if one of us dies, both of our names are on the mortage, house deeds and have a joint policy. We are not married and neither of us has any other property.

In this case if one of us dies would there be inheritance tax to pay?

Pablo Sanchez

music.babe75 wrote: »

In our case, the life insurance will only pay off the mortgage if one of us dies, both of our names are on the mortage, house deeds and have a joint policy. We are not married and neither of us has any other property.

In this case if one of us dies would there be inheritance tax to pay?

There is no inheritance libility on the payout of a joint/dual life assurance policy if the proceeds go to the second (surviving) life on the policy