Pension Term Assurance

Pension Term Assurance is also known as Pension Life Cover and Self Employed Term Assurance (SETA), although this does not mean that it is exclusively available to self-employed persons.

This is basically a level or convertible term life assurance plan that someone can take out up to their chosen retirement age (up to age 75 with some companies), and the premiums payable are eligible to receive tax relief @ up to 41%. This is, broadly speaking, the same product as term assurance, it just costs up to 41% less. You can add the indexation and conversion options into this plan.

Why would I need it?

As with all second level life cover, you would take out a plan like this to ensure that your family is covered in the event of you dying during your working years. If your family relies on your income to survive, then you need a plan like this. A pension term assurance policy can be taken out on one life only – joint life policies are not available.

The only potential drawback to this type of policy is that is cannot be assigned to anyone. You will not be able to use this policy as cover for a loan with a lender.

Pricing

Again, it can be quite safe to select a pension term assurance provider based on whichever is cheapest, however the optional benefits that life assurance companies offer can differ from company to company. Some companies may also insist on a lower retirement age than others.

An additional main benefit of this plan is the fact that the premiums can be up to 41% cheaper when tax relief is availed of.