Section 72 Insurance

[mathepac]

A female relative of mine is trying to get information about the above. I've never heard of it, but her explanation to me was that where her heirs , nieces and nephews, are named beneficiaries in her will, she can at this stage take out an insurance policy, maturing on her death that protects her heirs from crippling CAT.

Her estate now is in excess of seven figures and each beneficiary's share will be well beyond the threshold.

Have I got the right section and does anybody have any first-hand experience of section 72?

 

[mf1]

Everything you ever wanted to know about Section 60 policies.....................

http://www.askaboutmoney.com/showthread.php?t=103495

mf

 

[mathepac]

Many thanks. I did a search but couldn't see the wood for the trees.

 

[mathepac]

Armed with the content of the thread mf1 highlighted I did some research and the premiums are eye-wateringly expensive. My relative is looking at boosting contributions to an existing investment policy at far less cost for a potentially greater return to cover duties and taxes.

 

[Branz]

You are not comparing like with like
http://www.revenue.ie/en/tax/cat/guide/insurance-policies.html
shows how the math is done.

Do the math based on an after tax return for both the relative and the beneficiary.

The insures have done this math also and it is priced accordingly.
Have u compared whole of life Sect 72 vs whole of life vanillla?

 

[finnegan101]

as ircoha mentioned, some whole of life policies can be very attractive for looking after taxes... so too can the benefits of taking out policies on someone they have a financial interest in....
ie the children taking out a policy on the rich aunt !
fell free to send me an email if you want some options...

 

[Steven Barrett]

The premiums are expensive but nothing compared to the tax bill that you will be faced with on inheritance. You are effectively using some of your inheritance (as your aunt will pay the premiums and reduce the amount paid to you) now to reduce your tax bill in the future. Unless your aunt lives to a ripe old age it is unlikely that the total premiums paid will be greater than the payout and therefore the tax bill.

Steven
www.bluewaterfp.ie

 

[Leo]

fell free to send me an email if you want some options...

Please keep all discussions/ advice in the public forum, that is the purpose of AAM.

Any private emails or PMs straying into advertising will result in an immediate ban.

 

[finnegan101]

My apologies, i received an email from administrator re same, i wasnt aware it was not possible to go into more detail in private, my fear was too much generic advice that may not be case specific.
point noted though,
thanks