This may not be something you’ve thought of but by placing your policy in trust, you are removing it from your estate – i.e. the property, possessions and money you leave when you die. As inheritance tax becomes payable on anything you leave above £325,000 [4], a life insurance policy could go a long way towards reaching this threshold. If you remove it from your estate, then it doesn’t count towards this figure. Also, if it is not part of your estate, it can be paid out more quickly because there is no need to wait for the grant of probate which often has to be made after death and which can in some cases take several months. Many insurance companies can make this arrangement for you, so don’t forget to ask.