# Standalone Pension Term Assurance?



## Yellow Belly (22 Jul 2008)

When a claim is made on the above policy the sum assured is paid into the pension fund of the deceased? How is this money the distributed to his wife assuming that she is not up to retirement age?

I know that pensions are a complicated area so any advice or knowledge would be appreciated.


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## ClubMan (22 Jul 2008)

Anything useful  on pension term assurance policies in general?


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## DerKaiser (22 Jul 2008)

I'm pretty sure it's the same as regular term assurance except the premiums are tax deductable.  Can't understand why more people don't take them out


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## ClubMan (22 Jul 2008)

If it's the same as term assurance why are the proceeds paid into the deceased individual's pension?

Can anybody else explain why people don't avail of the tax relief on this rather than taking out regular mortgage protection or general life assurance?


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## GSheehy (23 Jul 2008)

ClubMan said:


> Can anybody else explain why people don't avail of the tax relief on this rather than taking out regular mortgage protection or general life assurance?


 
Only thing that I can think of is that the policies are non-assignable and can't be used as security for a credit transaction.

PS : If its' 'self-employed' stand alone term insurance, the qualifying criteria for effecting a policy are that you are either sel-employed or in employment and not a member of a pension scheme. Someone with a PRSA can effect this type of policy if there are no death in service benefits through employment.


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## NHG (23 Jul 2008)

With our one (i think and hope), on death four times the annual salary is paid out in a lump sum and the remainder is paid out like pension, a monthly sum.  Please correct me if I am wrong.


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## ClubMan (23 Jul 2008)

GSheehy said:


> Only thing that I can think of is that the policies are non-assignable and can't be used as security for a credit transaction.
> 
> PS : If its' 'self-employed' stand alone term insurance, the qualifying criteria for effecting a policy are that you are either sel-employed or in employment and not a member of a pension scheme. Someone with a PRSA can effect this type of policy if there are no death in service benefits through employment.


Thanks for that. So, if effect, such policies may only be available to a limited number of people? A bit like pension mortgages which were generally restricted to self employed too?


NHG said:


> With our one (i think and hope), on death four times the annual salary is paid out in a lump sum and the remainder is paid out like pension, a monthly sum.  Please correct me if I am wrong.


Surely the terms & conditions of the policy clarify?


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## GSheehy (23 Jul 2008)

ClubMan said:


> Thanks for that. So, if effect, such policies may only be available to a limited number of people? A bit like pension mortgages which were generally restricted to self employed too?


 
I'm not so sure I would go that far. I think that when you add up all the self-empoyed, those in employment but not members of pensions schemes + those that have PRSAs without any Death In Service, it's a pretty sizable market. It may be that the policies are undersold or that people are not aware that it is possible to get tax relief on a 'life insurance policy'. Company Directors can also put in place 'Executive Term Assurance', on a stand alone basis, and the company can pay the premium. 

I also think that the restriction on pensions mortages may be lender imposed. I don't think that there are legislative impediments that could deter a DC,DB,PRSA or AVC PRSA plan holder from opting for a pension mortgage, once you can establish that the 'Cash' value at NRD will be sufficent to clear the debt.


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## ClubMan (23 Jul 2008)

OK - thanks for the info.


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## LDFerguson (28 Jul 2008)

One reason why Pension Term Assurance policies may not be as popular as other forms of life cover could be the fact that you can only avail of the tax relief while you are in non-pensionable employment or self-employed.  So you might qualify now, but move job in a few years' time and become ineligible.  Your tax relief would cease.  

As mentioned above, they cannot be used as security for a loan.  They cannot be taken out in joint names, although two people can take out one each, if they both qualify.


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