According to Money Observer, those with assets totalling £275,000 or more (including a house) are especially prone to tax inspection. Writing your policy in trust is a way to avoid this and as a trust does not have to go through probate, beneficiaries of the policy will receive the payment without delay.* Only insuring the main earnerWhilst it is important to cover the main breadwinner, by neglecting to additionally insure the housewife or househusband may result in extra child care costs. Family income benefit (FIB) may be an appropriate policy to put in place.* Opting for a lump sum over incomeIf your dependents are likely to require an income, then buying a policy that pays out a lump sum is a mistake. Many people invest lump sums for an income, but when they invest it, they have to pay tax. Family income benefit provides a larger payout - tax free, though the majority of banks and building societies do not offer FIB, so ask an Independent Financial Advisor for recommendations.* Not proving full medical records or detailing comprehensive medical historyFailure to disclose a complete picture of your health, no matter how trivial, could invalidate a claim later on.There's no excuse for not conducting your own homework, as there is an abundance of information available online.

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