Inheritance Planning

What you need to know about inheritance plan

Whole-of-life – Section 72

Simply put, Section 72 insurance is a revenue approved life insurance policy. The proceeds of this policy are tax-free if used to settle an inheritance tax bill.  It’s a life assurance policy to cover inheritance tax.

Section 72 insurance is commonly used by parents to avoid an inheritance tax bill for their children.

Who can take out Section 72 insurance?

Section 72 insurance must be taken out on the life of the person leaving the inheritance and the premiums must be paid by that person.

How does Section 72 life assurance work?

Let’s say you calculate that on death your assets will result in an inheritance tax bill of €100,000 for your children. You can put a Section 72 whole of life assurance policy in place for €100,000.On your death, the proceeds of this plan will pay the inheritance tax bill so your children can inherit your estate tax-free.

How much does a Section 72 life insurance policy cost?

Like any life insurance plan, this depends on a number of factors:

  1. Your age
  2. Smoker or not
  3. Health issues
  4. Amount of cover you require

Where can I buy Section 72 insurance?

Zurich Life, Irish Life and now Royal London offer these plans. Fortunately for you, we deal with all three to get you the best deal.

Can children pay for a Section 72 life assurance plan?

No, but they can take out a whole of life insurance policy on their parent. If they pay the premiums, they will inherit the proceeds tax-free and can use these proceeds to pay the inheritance tax bill.
The life insurance company have to give you permission to take out a policy on a parent because usually there is no insurable interest between a child and their parent.

Is there a maximum age for Section 72 life assurance?

The contract can be started at any age from 18 up to 74.