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What is Section 72 insurance?

section 72 insurance

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:

  • Your age
  • Smoker or not
  • Health issues
  • 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?

In the past it was 74 but Royal London have brought out a new plan offering it from age 18.

Can I get an inheritance insurance quote online?

We can’t quote online for inheritance tax insurance.

Over to you…

Well, that’s the bones of how Section 72 insurance policies work, this article I wrote goes into more detail.

If you have a question that I haven’t covered or would like an indicative quote, please get in touch.

Nick McGowan
lion.ie | making life insurance easier

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