General

Life Insurance and your Islamic Will

If you have Life Insurance, this should certainly be listed as one of your assets. We recommend providing as much helpful detail as possible to assist your executors such as the insurance provider’s name and the policy number.

Your life insurance pay out will be counted as part of your estate for inheritance tax purposes. Whether the executors of your estate handle the life insurance payment and pass the money on to your beneficiaries or a lump sum/regular payment is paid to your dependents, the amount will be included in the overall value of the estate for inheritance tax purposes (though it will not usually attract income or capital gains tax).

Where life insurance is paid directly to a spouse or a charity, inheritance tax would not normally be charge.

Where your life insurance is written into a trust – that will go directly to the beneficiaries and sit outside of your estate.

This article is part of our Islamic Wills FAQ series.

Keep Reading

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.
You need to agree with the terms to proceed

 

This site uses Akismet to reduce spam. Learn how your comment data is processed.

COVID Vaccine on the way: 3 Essential Money Tips to Prepare
Gifting the family home during your lifetime | Islamic will
How To Invest Halal Without Losing All Your Money and Hair.

Follow IFG

YouTube
Every British Muslim needs a will. IFG Wills is an affordable quality option entirely online.
Get exclusive tips, resources and courses delivered straight to your inbox from IFG.
  • This field is for validation purposes and should be left unchanged.
Menu