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Life Insurance with Critical Illness

Is the Life Insurance payout taxable?


The Life Insurance payout won't be liable for Income or Capital Gains tax. However, if your estate is large enough, there may be an inheritance tax bill to think about.

The current threshold is £325,000 (2017-2018) so if your estate will be higher than this, you may need to think about ways to mitigate the potential tax bill when you die. The standard Inheritance Tax Rate is currently 40% on the part over the threshold.

More on Inheritance tax

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We've created lots of useful information to guide you through the process of finding which life insurance product is right for you.

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Why choose LV=

An insurance provider you can trust established in 1843.

  • 97% of claims paid in 2016
  • UK's largest friendly society

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From what's covered, ways to get set up or even how to claim, our library of FAQs can help.

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