The lump sum benefit payment is not subject to Income Tax however should the funds fall into your estate dependent upon the overall value of the estate, the payment could become subject to Inheritance Tax.
To eradicate the possibility of Inheritance Tax and ensure that the payment is made before Probate is granted life assurance policies can be Written into Trust. This will facilitate the lump sum benefit payment to fall outside of your estate.
An individual should also note that it would prudent to establish a will encompassing the proceeds of any Life Assurance policy to ensure that in the event of your death the distribution of funds will be according to their wishes. This is due to any specific expressions within a will supersede a death nomination form.
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