Those who want a life insurance policy to pay out quickly should ensure that it is written under trust, according to a new study.

Standard Life found that policies written under trust do away with the long waiting time for the grant of probate or confirmation to come through – which in some cases can take up to six months.

They can also help to avoid inheritance tax which is paid when the deceased's estate is worth more than £275,000. The taxman will take 40 per cent of the value of the estate above this figure including gifts made by the deceased in the seven years before they died.

But when the life insurance policy is written under trust, the tax can be avoided because the policy is owned by the trust and not the deceased.

However, just one life insurance policy out of ten is currently set up this way.

Julie Hutchison, estate planning specialist at Standard Life said: "People should ask themselves why they would not put their policies in trust rather than questioning the need to do so. Trusts and life assurance policies should go hand in hand."

"Don’t think of trusts as only being for inheritance tax purposes — for many people inheritance tax is still a marginal issue.

"Trusts are a most useful way of ensuring speedy payment of claims so loved ones can get on with their lives without worrying about meeting ongoing financial commitments," she added.