Inheritance tax is also due when an insurance company pays out a capital upon someone's death or starts paying an annuity. If the insurance has been taken out by the deceased on his own life, the beneficiary will have to pay inheritance tax. 

Inheritance tax is also due if the insurance is taken out by someone else on the life of the deceased.  That is, in principle, the case for an an insurance taken out by the employer, but statutory insurance schemes (a state pension paid to a surviving spouse) or a group insurance scheme set up by the employer are specifically exempted.  

The group insurance taken out by a management company on the life of its self employed company director is not excluded.

Inheritance tax is also not due if the beneficiary has taken out insurance on the life of the deceased.  He just recoups his investment which may result from a donation from the deceased.