MONEYWEB app instead? Your insurance policies and estate duty Getting the estate duty implications of your life assurance policies wrong can have severe consequences for your estate and your loved ones. 18 February 2021 07:33 Image: Shutterstock Life insurance can make an excellent estate planning tool to ensure succession, make provision for loved ones, and to create liquidity in oneâs estate. However, it is important to understand the estate duty implications when it comes to life assurance policies because getting it wrong can have severe consequences for your estate and your loved ones. Section 4q deductions At the outset, bear in mind that in terms of section 4(q) of the Estate Duty Act, the value of all property which accrues to the surviving spouse is deductible from the gross estate of the deceased. This is the case whether the surviving spouse inherited in terms of intestate or testate succession, and includes the proceeds of any domestic life policy where the surviving spouse is the named beneficiary. The proceeds of such a policy are paid directly to the surviving spouse and therefore do not attract estate duty nor executorâs fees. The definition of âspouseâ in the context of section 4(q) includes a permanent life partner and not only a legal spouse in terms of the Marriage Act or the Civil Union Act.