Putting protection policies in trust is a great way to make sure your clients’ loved ones or business is protected. Our guide explains why you should set up a trust for your client, the different trusts we offer, and how to set one up using our online trusts or paper forms.

Key documents


How to set up a trust with us

Online trusts

For new personal and business applications. More freedom, more flexibility, and no need for signatures.

Personal trust tool

For existing personal protection policies or if you want to use a paper-based trust for a new policy.

Business trust tool

For existing business protection policies or if you want to use a paper-based trust for a new policy.

Benefits of a trust

By placing your client’s protection policy in a trust, they can benefit from:

 

 

Better control

Trusts make sure the money goes to the right people at the right time.

Faster payments

Trusts exclude life insurance benefits from probate, so the money can be paid quicker.

Reduced inheritance tax

The money paid out won’t pay into your client’s estate, which helps to reduce any potential inheritance tax bill.

Protects those who are most important

Your client can nominate the beneficiaries they want.

How do Trusts work?

There are three key roles in a trust:

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Settlor

The person or people setting up the trust. They choose who benefits from the policy and who looks after the money (the trustees). The settlor is responsible for paying the premiums and is automatically a trustee. The settlor for Relevant Life Plan trusts is called the Principle Employer.

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Trustees

The people chosen to look after the trust by the settlor. They make any future claims and arrange for the money to be paid to the beneficiaries in-line with the settlor’s instructions. They take legal ownership of the trust fund and act in the best interests of the beneficiaries.

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Beneficiaries

The people who will receive the money from the Personal or Relevant Life Plan trust fund. This could be a spouse, registered civil partner or children – the settlor can nominate anyone they like. For Share Protection trusts, the beneficiaries will be the other business owners.

Our range of trusts

We have different types of Trusts to suit your client’s needs:

trusts
Type of Trust Reason for cover Available for Single/Joint plans? Change beneficiary? Online access Who benefits?
Flexible Personal Yes Yes Single life policy only Your client names default beneficiaries who are first in-line to receive the benefit. The trustees can also use their discretion.
Discretionary Personal Yes Yes Single life policy only The trustees have discretion over who will receive the benefit, but specific guidance can be provided in a letter of wishes.
Survivors Personal Joint life policy
only		 Yes Yes The surviving life insured will automatically receive the benefit (if they survive the first to die by 30 days).
Relevant Life Plan Relevant Life Plan Single life policy only Yes Yes The trustees have discretion over who will receive the benefit, but specific guidance can be provided in a letter of wishes.
Business Protection Share Protection Key Person Single life policy only Yes Yes The co-business owners.
Absolute Personal Yes No No Your customer names the beneficiary at the outset and it cannot be changed.