If you are married and are planning to leave everything to your spouse, he or she will not face an inheritance tax bill when you die because gifts to a husband or wife are exempt from this. However, if you are not married or your estate would pass to your children or other relatives on your death, there may be an inheritance tax bill depending on what you are worth and how your finances are arranged.
The cheapest way of using life insurance to cover any possible tax bill is to include the amount in your life cover calculations and to have the policy written in trust for your beneficiaries so that the proceeds from the policy don’t count as part of your estate when you die.

However, the disadvantage of using term insurance to cover a possible inheritance tax bill is that once the policy comes to an end, so does the insurance against the tax bill.
If you would want the cover to continue until your death, consider whole-of-life insurance to cover the future tax liability.