§ Mrs. Ewing
To ask the Chancellor of the Exchequer what plans he has to introduce measures to permit, without loss of exemption of the policy proceeds from taxation, extension of existing policies of endowment assurance to provide cover against critical illness.
§ Sir George Young
The Inland Revenue is currently conducting a review of life assurance taxation which includes consideration of the way in which policyholders are taxed. The Government will decide in due course in the light of that review whether or not changes to the present rules on policyholder taxation should be introduced and whether or not existing policies will be affected by any changes. However, under present legislation, it is already possible in certain circumstances for critical illness cover to be added to the cover provided by an existing endowment policy without affecting the exemption of the proceeds from taxation at the higher rate. There is also no bar to policyholders taking out separate critical illness cover.