LV= uses cookies to give you the best experience online and to provide anonymised, aggregated site usage data. You can find out what cookies we use and how you can disable them in our Cookie Policy. By continuing to use our website, you agree to our use of cookies in accordance with our cookie policy unless you have disabled them.

skip to main content

Putting your life insurance policy into trust

To help you put your life insurance policy in trust, you can use our new Trustbuilder tool. You can use this to help you decide on the right type of trust and complete it online.

There are different types of trust available and it may not always be clear which should be used so if you're in any doubt you should seek legal advice.

The information on this page shouldn't be taken as advice. Once you've put a policy in trust you can't change your mind later so you need to be really sure that it's right for you. If you're in any doubt, you should speak to a solicitor or seek financial advice.

The basic facts of trusts

  • A trust is a legal arrangement that lets the owner of something 'gift' it to someone else. This could be shares, a home, cash, or a life insurance policy.
  • This is done by creating a trust deed which sets out the terms and conditions that the trust can operate under.
  • Normally, placing a policy in trust is an 'irrevocable' act. This means once the policy is in trust this decision can't be changed later on, so it's important to carefully consider if putting a policy in trust is right for you.
  • You can put a life insurance policy into trust as soon as it starts, or at a later date.
  • We offer two types of trust - fixed and flexible.


  • Proceeds are paid to the right person/people.
  • Proceeds are paid out quickly; we won't need to wait for probate (which can sometimes take several months).
  • Helps avoid inheritance tax - the proceeds won't normally be included in the deceased's estate and can usually pass tax-free to whoever is chosen as beneficiaries.


  • The policy can't be taken out of trust later on.
  • Control over the policy is given to the trustees so you can't make changes to it.
  • You can't benefit from the policy (this isn't usually a problem if you're the only policy owner but it can get complicated with things like joint life policies).

Who is needed to set up a trust?

There are three groups of people needed to set up a trust. These are the settlor, the trustees, and the beneficiaries. These are commonly used terms referred to in our trust deeds, and throughout our trust pages.

The settlor
This is the person or people who set up the trust, and put their life policy into it. So they are the current owners of the life insurance policy. The settlor chooses the trustees and decides who they would like the beneficiaries to be.
The trustees
These are the people responsible for looking after the policy put into trust on behalf of the person or people who will get the money when the life policy pays out – the beneficiaries.
The beneficiaries
These are the people who will get the money from the trust.

At LV= we have two types of trusts - fixed and flexible. Below are the differences between these two trusts:

Type of trust



Can the beneficiaries be changed later on?



Who are the beneficiaries?

Exactly who you name when you set it up.

You choose potential beneficiaries when you set up your trust. You also choose who should benefit if a claim were made straight away (the default beneficiaries). The trustees can pay trust funds to any of the potential beneficiaries.

What changes can the trustees make?


The trustees have the power to change the 'default beneficiaries' to any of your 'potential beneficiaries'.

Who decides how much each beneficiary gets?

You do when you set up the trust.

You do when you set up the trust, but the trustees have the power to change this.

What information will I need?

Before you start the Trustbuilder it would be useful to have policy details to hand (if your policy has already started).

It will also make the process much quicker if you have the following:

  • The names and addresses of the people you would like to be trustees
  • The names of the people that you want your life cover to be paid to when you die (the beneficiaries)

What happens to the information I enter into your online Trustbuilder?

Any information that you enter into our Trustbuilder system will only be used to create your trust deed and won’t be used for marketing purposes. Once the trust deed has been created for you, the information you’ve entered will be deleted from our records and systems. We’ll only record the details on our systems once you have sent the signed deed back to us. So it’s important for you to tell anyone whose details you’ve entered and named on the trust deed, that this will be happening.

Can I change my mind later?

Placing a policy in trust should be considered carefully. Once the trust has been set up, you can't normally change your mind later on and take the policy out of trust.

What types of policies can I put into trust?

The following products can be placed into trust using the Trustbuilder:

  • LV= 50 Plus plan*
  • LV= Life Insurance
  • Life Protection (available as part of our Flexible Protection Plan)
  • LifeTime+
  • Family Income Assurance

*With our 50 Plus plan there is an option called the Funeral Benefit option. If you’ve chosen this option you can’t also put your policy in trust. If you think this applies to you, please contact us, and we’ll be able to tell you if you’ve taken out this option.

What about Inheritance Tax?

One of the main benefits of placing a life policy in trust is that it won’t normally be included in your estate for inheritance tax purposes. Also for most life insurance policies the premiums that you pay will usually be exempt, because the premiums are usually paid from your normal income. Exempt gifts are not subject to Inheritance Tax.

If you’re concerned about Inheritance Tax you should speak to a financial adviser or a solicitor before you put your policy in trust.

Any references to taxation are based on our understanding of current legislation and HM Revenue and Customs practice, which can change.

Is it right for me?

You shouldn’t use our Trustbuilder if your financial arrangements are complex. Our trusts are basic types of trust (flexible and fixed) for use with life cover policies only. It’s up to you to decide if the trust selected by the LV= Trustbuilder is right for you. If you're in any doubt you should seek legal or financial advice.

Our Life Insurance application is quick and easy