Pension Term Assurance is life cover that pays out a lump sum if you die during the term of the plan. The advantage of this type of life cover is that it costs less because you may be eligible to claim tax relief on your contributions (up to certain limits). To claim income tax relief, you can apply to your inspector of taxes to adjust your tax credits. You can use any of your allowance to buy pension life cover and get tax relief.
You pay a regular amount of money into your Pension Term Policy. Your contribution can provide the level of life cover you need until the date you have chosen for retirement. The cost is guaranteed not to increase before that date unless you choose to include the indexation option. No payment is made if you survive to the end of the policy.
It is available to all individuals in employment who do not currently have a pension. You can insure up to four times your salary; if you insure more, only four times is paid out or the balance is paid similar to a Pension for Executive Pension Term. There is no limit for personal pension term.
There are two types: Personal or Executive.
– Can’t be used as security for a loan
– SIngle life plan only
– Does not accumulate a value
– The amount of income tax you can claim depends on whether you are eligible