IHTM20231 - Life Policies: policy on the deceased’s life not connected with any other transaction (except a trust): policy effected by the deceased for their own benefit but gifted later: value of policy: general rule
As a general rule the value of a life policy is its open market value in accordance with IHTA84/S160. The open market value (IHTM20083) is the amount for which the policy could be sold, and might be more than the surrender value (IHTM20083).
The Actuarial Team is responsible for the valuation of life policies on an open market basis.
The guidance at IHTM20241 explains the special rules for the valuation of policies for Inheritance Tax purposes in certain circumstances.