Could a pension be a form of life assurance.

mrbg07546

I’m under 35 and married with 2 kids.

If I Day (say before 50) would be wife get what ever is in pension pot?

So wouldn’t this be classed as a form a life assurance?

McKneff

Do you mean a private pension.

It would depend on how you have set it up.

Look at your paperwork or ring your pension provider.

xylophone

What sort of pension is this?

Thrugelmir

Have used my pension savings as such for the past 30 years in this way.

Aegis

mrbg07546 wrote: »

I’m under 35 and married with 2 kids.

If I Day (say before 50) would be wife get what ever is in pension pot?

So wouldn’t this be classed as a form a life assurance?

Yes, but bear in mind that your pension is what you're saving for retirement, so it is likely to be wanted for much the same purpose by your wife. As such, if you have a need for life insurance it may be worth holding some alongside the pension to provide pre-retirement benefits.

teddysmum

Pensions have many variations, with some having options right up to the time the buyer starts receiving payments. My husband's even had an option two years ago of receiving a third more of the current payout ,which would then be fixed or leave as it is increasing according to RPI or CPI (can't remember which) up to 5%.


With this pension,had he died before pension age, I would have been given a lump sum and no more,but now he has passed that age I would get half what his monthly payment would have been ,if he hadn't decreased it by taking a lump sum,also increasing as above.

dunstonh

o wouldn’t this be classed as a form a life assurance?

Its not a life assurance. However, when you complete your shortfall analysis of how much your wife is worse off in the event of your death, the value of the pension can be taken into account.

It is worth noting there are differences in pension types with regards to death benefits. So, make sure you know what yours is.

zagubov

Some occupational pensions can function like that (the Teacher's Pension could, for example).

You may want to take that into account when getting insurance to cover a mortgage.

letspretendforaminute

I believe so.

I transferred all my old civil service Defined Benefit schemes into a SIPP three years ago partly for the life assurance element... not sure if this permitted nowadays. The death in service lump some was something like £2,000 plus a spousal pension of £200 per annum (half mine). The transfer was worth £10,000 and that’s increased to £24,000 as of last week. Half is invested in income generating assets (already beating the so called gold plated scheme) and the remainder is split between 3 fledging companies, I anticipate one might fail and the other two have the potential of delivering the same performance. All speculative but ultimately the whole pot is worth x10 the civil service one.

Proper life assurance is still a far more realistic product by design and not that expensive. I pay £8 a month for £125,000 of cover to age 50 (took out 5 years ago with another 10 years to run - to coincide with our children reaching young adulthood).

GunJack

letspretendforaminute wrote: »

I believe so.

I transferred all my old civil service Defined Benefit schemes into a SIPP three years ago partly for the life assurance element... not sure if this permitted nowadays. The death in service lump some was something like £2,000 plus a spousal pension of £200 per annum (half mine). The transfer was worth £10,000 and that’s increased to £24,000 as of last week. Half is invested in income generating assets (already beating the so called gold plated scheme) and the remainder is split between 3 fledging companies, I anticipate one might fail and the other two have the potential of delivering the same performance. All speculative but ultimately the whole pot is worth x10 the civil service one.

If you're still in the CS then I suspect that was a bad move - the Classic DB Death In- Service was 3x salary, with a survivor's and dependant's pensions...either very low salary, very short service, or combination of both.

My current DB (CARE) scheme DIS is 4x salary with survivor's pension, so as has been stated earlier, it depends on the scheme the OP's in...

Alexland

Check the trustees have your latest expression of wish as to who your beneficiaries should be.

Also worth considering that your partner's expenses in retirement (if single) might be higher than the proportion they would have otherwise paid (sharing costs in a household efficiently) so some of your retirement scheme money might be need to help subsidise their standard of living as a widow in retirement?