Pension contributions insurance?

borborygmous

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

Andy_L

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

It's called waiver of contribution insurance.

uk1

Wouldn't ordinary income protection insurance cover do?

westv

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

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.

jamesd

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.