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Pension Life Insurance - Top February Online Offers
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Pension insurance pays a lump sum in the event of death within a specified period of your choice. This is called the term, so this type of insurance is often referred to as pension term insurance, or pension term assurance.
With this type of cover, if you are a standard rate tax payer, you could save between 5% and 15% on your life insurance, with people in the higher rate tax bracket really benefiting, saving up to 30%.
New rules introduced state that any pension taken out after 6th April 2006 that can be combined with life insurance into a single premium, will be able to offset the pension contribution tax allowance against the cost of the life insurance.
Your monthly premiums receive 22% tax relief, and this is where the savings come from. Pension term policies cost more for the insurance provider to manage than regular life insurance, which is why the savings are between 5% and 15% as opposed to the full 22%. The company which holds your policy will be able to arrange these reductions automatically.
Pension term assurance is available to all taxpayers in the UK under 75 years of age.
It is one of the simplest forms of life insurance policy as you are covered for as long as you pay the monthly premiums. If you stop paying the premiums, the policy stops.
There are two types of pension life insurance policy available:
1. Level term assurance. The lump sum payable on death remains constant throughout the period of the term.
2. Decreasing Insurance. The lump sum payable on death decreases by a fixed amount throughout the period of the term. This cover is usually used for mortgages and other loans where the amount owed decreases year on year.
Unfortunately, this combined policy cannot be purchased on the internet therefore you are likely to miss out on the cheapest prices available.
