Making sure the right people benefit

If you have a CanProtect Whole of Life Plan, Flexible Life Plan or one of our CanProtect Term and Term Plus plans it is important to make sure that, in event of you dying, the proceeds of the policy are paid to the right people in a tax-efficient way.

Without the use of a suitable trust any amounts paid out under the plans will form part of your estate for inheritance tax purposes and your beneficiaries could lose up to 40% of the money to the taxman.

The use of a trust could mean that the proceeds are paid directly to the trustees or the beneficiaries, outside of your estate and without the need to wait for probate.


For the CanProtect Whole of Life and Flexible Life Plan there are two types of trust:

  • A bare or absolute trust, where the beneficiaries are named at outset and cannot be changed. If the sum assured is paid out and the beneficiaries are over the age of 18 then the beneficiaries can demand payment.
  • A discretionary trust, as the name suggests, gives the trustees discretion, so if the sum assured is paid to them they can decide who benefits from the trust and when they benefit. As there is this level of flexibility the tax rules around a discretionary trust are different to those for an absolute or bare trust.

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Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised and regulated by the Financial Conduct Authority.