Recent government changes to the way life funds are taxed means that we can now offer the same rates for Pension Term Assurance that we offer for normal Term Assurance (Life Cash Cover) plans.

This means that:-

• A reduction of approximately 15% in Pension Term Assurance rates for customers
• Simpler comparisons between Term and Pension Term for you
• The opportunity for tax relief on life cover rates

Example of new rates from 17/4/2001

Who is Pension Term Assurance suitable for ?

The aim of Pension Term Assurance is to provide money to replace people's income if they should die before retirement.
To encourage people to cover themselves for this, the Government offers tax relief in the same way that they encourage people to fund for a replacement income after retirement through pension planning.
As such, this cover is needed by anyone whose family income would suffer if they were to die before retirement. It is available in personal pension, company pension and additional voluntary contribution (AVC) format.
Usually the core markets are:-

• Self employed people who are eligible for a personal pension
• Those in small companies who are likely to be in non pensionable employment
• Company directors, who can let the company pay without suffering BIK
• Existing pension customers with insufficient or no life cover through their pension
• People without enough standard life cover for this purpose

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What tax relief is available ?

In general, it is the same as it would be for whatever type of pension is relevant. There is a maximum amount of cover for company and AVC Pension Term Assurance.
For personal pensions, there used to be a limit of 5% of net relevant earnings for tax relief purposes. This is now gone, and the same rules apply as for personal pensions. In other words, if you are 45, you can pay up to 25% either into a pension, Pension Term Assurance or a combination of both.

Other features

A Conversion Option is available in the same way as Term Assurance. Customers with this option can convert into another Life Assurance Plan without medical evidence before the plan ends. Inflation protection is also available in the same way as Term Assurance - i.e. the cover increases at 5% annually, and the cost increases at 7% annually. There is a small up front charge for both of these options.

Quotation/application

Pension Term Assurance is available on the relevant pension application forms. It is also available under pensions for quotation purposes.

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