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Pension contributions insurance?

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I've come across this before but I'm having trouble finding any discussion about it online, on MSE or elsewhere. What I'm talking about is insurance that covers making (some fraction of?) your pension contributions in case you are unable to pay (presumably covering ill health, perhaps other things).

Can anybody offer any links to discussion of the market, analysis of pros/cons etc.?

Thanks

Comments

  • Andy_L
    Andy_L Posts: 13,017 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Never heard of such a product, I don't see why you'd want such a product rather than a generic Accident Sickness & Unemployment policy or Permanent health Insurance
  • westv
    westv Posts: 6,441 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    It's called waiver of contribution insurance.
  • uk1
    uk1 Posts: 1,862 Forumite
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    Wouldn't ordinary income protection insurance cover do?
  • westv
    westv Posts: 6,441 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    uk1 wrote: »
    Wouldn't ordinary income protection insurance cover do?

    It's obviously a lot cheaper if it's all you want to cover.
  • dunstonh
    dunstonh Posts: 119,617 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Normally referred to as waiver of premium or waiver of contribution. Go back 25-30 years and most pensions had it as default. You could get tax relief on the WOP until 2001 and was considered best advice to have it.

    Nowadays, most providers no longer have it available as pensions have moved away from being a product to being a tax wrapper instead.

    It is still available with a few providers but the market for it has largely gone.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • jamesd
    jamesd Posts: 26,103 Forumite
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    If you'll only be unable to pay short term the cover isn't really needed because you can just catch up later.

    If it's long term then permanent health insurance is an option. That will pay an income until you reach state pension age and from that income you can make pension contributions or other investments. Two broad types, own job that pays if you can't do your normal job and any job that pays out only if you can't do any job. Own job is naturally more expensive because there's a higher chance of paying out.

    Cover varies and can be at levels like 60% or 75% of your normal pay. Some policies are cheaper and deduct money received from means tested benefits, others don't. Company schemes might have a waiver for this even if the general version doesn't.

    PHI is the insurance product which I have that I most value because I could end up having to live with whatever caused me to be unable to work for a long time. Something that could keep me from doing my job would not be pleasing to live with but having little money as well would be worse still.
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