What are the main benefits of insuring a policy in trust?

Insuring a policy in trust primarily allows for direct payout to beneficiaries without incurring tax implications, which is a significant advantage in estate planning and financial protection strategies. When a life insurance policy is placed into a trust, the death benefit can be transferred to the beneficiaries without being part of the deceased's estate. This means that the payout is not subject to inheritance tax, preserving more of the benefit for the intended recipients.

Additionally, setting up a policy in trust ensures that the funds are distributed according to the policyholder's wishes, irrespective of any potential delays or complications that may arise from probate. This structure provides both financial efficiency and peace of mind, making it a preferred option for those looking to secure their beneficiaries' financial futures while optimizing tax outcomes.

The other options, while they may hold some appeal, do not accurately encapsulate the primary benefits associated with insuring a policy in trust.