Investment Bond - cashing in

[Miss F]

Hi all, I’ve been looking online at information and wonder if anyone can give me a little more info :-

My relative has an investment bond/life policy which was taken out in Jan 2001. It was a single premium of £50,000 and is now worth approx £200,000.
She has never accessed any funds from it.
I haven’t spoken to the provider yet but I have a feeling that the policy was not set up in trust and will form part of her estate and therefore be potentially liable to IHT

I know that she could have taken 5%/year from the initial investment on a tax deferred basis. As the policy has been going for so long that means that she can access the full initial payment ie £50,000.
I have read online about ‘top slicing’, my understanding is that she has a gain on this investment of approx £150,000 but as she has held the policy for 25 full years that equates to a gain of £6000 per year. She is a 20% tax payer with an income of approx £30,000/year and therefore an extra £6000 will not push her into a higher tax bracket if she decided to cash the policy in full. She is not in receipt of any benefits other than the state pension which she hates to class as a ‘benefit’.

My questions are:- is top slicing done automatically by the insurer, or do you have to pay the excess tax and then claim it back from HMRC?
2) if she were to cash the policy in (in full), is the full total ie £200,000 used by HMRC to determine her income for the year therefore meaning that she would lose her personal allowance etc and would have to complete a personal tax return, which is something that she has never had to do previously.
3) Is it more efficient/ tax effective to do smaller withdrawals of say £50-£60k over the next 4 tax years so that she doesn’t have an income of over £100,000 - she is currently 88years old and in reasonable health.
4) Is it possible to alter the beneficiaries on the policy to be named relatives rather than her estate?
5) If so would that take the policy out of her estate for IHT and if that was done would it be classed as a gift meaning that she had to survive for 7 years for IHT?

I’m not sure why the original policy wasn’t written in trust, her late husband made all the financial arrangements and for some reason he made the estate the beneficiary on second death.
Apologies for the length of this question, any help would be greatly appreciated