By Brian Whelan QFA · Updated 3 November 2026
Policy example: joint-life second-death policy (male aged 55 next birthday, female aged 55 next birthday, both non-smokers).
€600,000 for an inheritance tax bill. An effective cost of €159,799.23.
That is the benefit shown in the age-83 example below. Rather than leaving your family to find €600,000 from their inheritance, you pay regular premiums during your lifetime. The Section 72 policy then provides the €600,000 when it is needed.
There are two financial benefits: the policy pays the tax bill, and paying the premiums reduces the money left in your taxable estate. Together, these can make providing for the bill much less expensive for your family.
Without cover: find €600,000 from the estate.
With cover: an effective premium cost of €159,799.23.
A difference of €440,200.77 in the age-83 illustration.
How does €159,799.23 provide €600,000?
In this example, a couple arrange a joint-life second-death policy with €600,000 of cover and a monthly premium of €705.64, guaranteed for life. The policy pays out when the second person dies.
For the age-83 illustration, they make 338 monthly payments:
- Total premiums paid: €238,506.32.
- Inheritance tax your family would have paid on that money: €78,707.09.
- Effective cost to the estate: €159,799.23.
The effective cost is the premiums paid, less the inheritance tax that would have been due on that money had it stayed in the estate: €238,506.32 − €78,707.09 = €159,799.23.
The €78,707.09 is a lower inheritance tax bill for the family. The actual premium payments still total €238,506.32.
At a glance: assuming the second death at age 83
| Funding the tax bill | Without Section 72 | With Section 72 |
|---|---|---|
| Money needed to fund the CAT bill | €600,000 | €600,000 |
| Where that money comes from | Cash or assets in the estate | Section 72 policy payout |
| Need to use the inheritance to provide this €600,000? | Yes — a sale may be needed if there is not enough cash | No — the policy provides the money |
| Effective cost of providing the €600,000 | €600,000 | €159,799.23 |
€600,000 provided for an effective cost of €159,799.23 — €440,200.77 less than taking that €600,000 directly from the estate.
Why paying the premiums makes a difference
Imagine leaving €1,000 of taxable money in your estate. At a 33% inheritance tax rate, your family receives €670 after tax.
If you use that €1,000 to pay Section 72 premiums instead, you are putting it towards a policy that provides money to pay the inheritance tax bill. You have also removed €1,000 from the taxable estate, reducing the tax on the estate by €330.
That is why comparing the payout with the premiums alone misses part of the benefit. The lower inheritance tax bill also belongs in the comparison.
What if the second person lives to age 100?
It is useful to see the cost over a much longer payment period too. In this quotation’s age-100 illustration, 542 monthly payments total €382,456.88.
- Policy payout: €600,000.
- Total premiums paid: €382,456.88.
- Inheritance tax your family would have paid on that money: €126,210.77.
- Effective cost to the estate: €256,246.11.
| Funding the tax bill | Without Section 72 | With Section 72 |
|---|---|---|
| Money needed to fund the CAT bill | €600,000 | €600,000 |
| Where that money comes from | Cash or assets in the estate | Section 72 policy payout |
| Need to use the inheritance to provide this €600,000? | Yes — a sale may be needed if there is not enough cash | No — the policy provides the money |
| Effective cost of providing the €600,000 | €600,000 | €256,246.11 |
Even over this longer payment period, the effective cost is €343,753.89 less than taking €600,000 directly from the estate.
Keep the family home. Have the tax money ready.
The benefit is practical as well as financial. An inheritance may include a family home or other property, without enough cash to pay the tax. A Section 72 policy provides a separate fund, helping your family keep those assets rather than selling them to raise the money.
Instead of leaving the family to fund a large bill in one go, you prepare for it through regular payments during your lifetime.
What would the figures look like for your family?
I can prepare a personal report showing your estimated inheritance tax bill, the cost of cover and a clear with-and-without comparison. We can look at different payment periods and an amount of cover that suits your budget. You do not have to cover the entire bill.
Request your Section 72 quote and personal comparison, or call Brian on 01 668 6136.
Illustration assumptions: the premium money would otherwise remain in the estate and be taxed at 33%; the full €600,000 payout is used for qualifying inheritance tax. The effective premium cost is not the total cost of settling the estate. Figures exclude investment growth and inflation, and use the payment periods in this example quotation. Your own figures and policy terms will differ.