Investment bond with death benefit

susiesww

My partner and I are starting to plan for retirement. He is 54 with a fire service pension already in payment and a part time job at the council and a member of that pension. I work for the council and so will have that pension and also have a small sipp.
We are not married and do not live together due to work and family.
we want to save so we can have nice holidays and also want some form of life insurance to pay to the other.
as we aren't married our pensions will stop on death as I understand it. And even if we married I don't think the fire service pension allows benefit for new spouses.
I own my own house mortgage free.
What we want is to keep each other financially secure should one of us die, without involving our property as my house proceeds would go to my children and his to his children.
I am thinking of an investment bond with death benefit, would this work.

kidmugsy

susiesww wrote: »

My partner and I are starting to plan for retirement. He is 54 with a fire service pension already in payment and a part time job at the council and a member of that pension. I work for the council and so will have that pension and also have a small sipp.
We are not married and do not live together due to work and family.
we want to save so we can have nice holidays and also want some form of life insurance to pay to the other.
as we aren't married our pensions will stop on death as I understand it. And even if we married I don't think the fire service pension allows benefit for new spouses.
I own my own house mortgage free.
What we want is to keep each other financially secure should one of us die, without involving our property as my house proceeds would go to my children and his to his children.
I am thinking of an investment bond with death benefit, would this work.

If you are determined not to marry then how about a joint life insurance policy that pays out to the survivor? I suggest this because I assume that an investment bond combines the insurance function with the investment function, and I don't see an advantage in that. I also don't see that an insurance bond is a natural way to fund holidays.

Perhaps it should include a clause that if the survivor dies within thirty days of the first death, then the payout be split evenly between the two sets of children.

Since you'd want the policy to run on indefinitely until the first death, it obviously won't be a term policy - I presume that it would be a whole-of-life policy. You'd want to make sure that it had flat payments; you don't want the provider raising the payments in the future.

kidmugsy

P.S. You would end up paying rather a lot for the luxury of not being married, but so be it if that is what you want.

susiesww

I'm only objecting to marriage as I don't see the point but maybe financial security for us both is the point then

TH1878

Would definitely be better to be married.

I would double check with the fire service re their definition of spouse - is it the spouse at the date of drawing benefits or date of death. Most schemes are the latter but I'm not sure with the fire service.

An investment bond is unlikely to be the answer for you - I'd just look at some life insurance / family income benefit plan.

MAKE SURE YOUR WILLS ARE CORRECTLY DRAFTED!

kidmugsy

TH1878 wrote: »

MAKE SURE YOUR WILLS ARE CORRECTLY DRAFTED!

Yes: don't use cheap will forms, go to a competent solicitor. You could also ask about getting prenuptial agreements - though for that you'd need separate solicitors. It seems that the courts are putting more weight on them nowadays.

"I'm only objecting to marriage as I don't see the point but maybe financial security for us both is the point then": the whole point of marriage is financial - its purpose is not a lot of romantic goo. If young people are going to bring up children, or older people try to ensure their widow has adequate income, then marriage is the, or an, answer.

It's a pity that inept divorce laws have done so much to help undermine it.

HappyMJ

susiesww wrote: »

I'm only objecting to marriage as I don't see the point but maybe financial security for us both is the point then

A friend of mine objected to marriage too. She had to get married to her partner for the reasons you've posted. It wasn't in any way romantic just a quick trip to the register office wearing jeans and a nice top just with 2 witnesses, back to the pub for a few drinks and back home again. Now she and her partner have financial security and can also choose a course of action for the other if the other is in hospital. She keeps her current name and not much has changed. She will now get her partner's pension if he were to die. It is not payable to people who are in a relationship but not married.

xylophone

I don't quite understand why either of you would not be financially secure if the other died?

You each have your own home, savings and pensions so why is the extra protection needed?

That said, you could each take out a life insurance policy written in trust for the other?

Or your wills specify the other as beneficiary of all assets except the house?

dunstonh

I am thinking of an investment bond with death benefit, would this work.

Why are you selecting what is not generally regarded as a minority use tax wrapper? S&S ISAs are typically above it in the tax efficiency pecking order. Unwrapped holdings are for basic rate taxpayers or lower. Higher rate taxpayers may be better off with an investment bond.