Could a pension be a form of life assurance.

hugheskevi

If you're still in the CS then I suspect that was a bad move - the Classic DB Death In- Service was 3x salary

Classic death-in-service is 2*salary.

LHW99

The drawback with using pension savings as if they were life insurance is the minimum age that some can be accessed at.
You could take out life insurance at 25 and fall under a bus the next day and the life insurance would pay out. Although some pensions would also allow a wife to access the fund at that age, some won't and in any case the amount available possibly wouldn't be enough to cover a mortgage and provide an income while young children are growing up.

Silvertabby

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. Originally posted by letspretendforaminute

I assume your CS pension was deferred, as death in service benefits would have been far more than a lump sum of £2K and a spouse's pension of £200 per annum.

letspretendforaminute

Silvertabby, correct and a pertinent point. I only worked in the CS for two years. For the sum taken out it shows the value of such a scheme.

bostonerimus

Any form of saving is a sort of insurance. You are putting money aside for the future, it's a sort of self insurance. However, if you have dependents that you be financially impacted by your death then it's a good idea to buy simple life insurance that pays out on death. As you get older and the kids leave home and you have saved more and have retirement covered then the need for life insurance decreases.

Do not combine investing with life insurance in a single product. Simple term insurance is inexpensive and worth while for most young families

mrbg07546

Ok. Maybe

Our house is worth 525 and we we have 270k on mortgage.

I earn 60k and wife is part time earning 15k

Me and wife are 32 years old.

We have no savings and 25k in debt on CC

I have a pension with 65k accumulated so far and wife has 10k accumulated so far.

We have 2 kids (9 months and 3.5 years)

I have income protection insurance.

What other things should I get in case I something happens to us.

I presume critical illness and life insurance?

My wife works for nhs. She claims they don’t do life insurance? I don’t believe her???

Kynthia

mrbg07546 wrote: »

Ok. Maybe

Our house is worth 525 and we we have 270k on mortgage.

I earn 60k and wife is part time earning 15k

Me and wife are 32 years old.

We have no savings and 25k in debt on CC

I have a pension with 65k accumulated so far and wife has 10k accumulated so far.

We have 2 kids (9 months and 3.5 years)

I have income protection insurance.

What other things should I get in case I something happens to us.

I presume critical illness and life insurance?

My wife works for nhs. She claims they don’t do life insurance? I don’t believe her???

So what would happen if you died tomorrow? How much would your wife and children get from you after your debts had been paid? How much would they need? Will there be enough for her to spend time with your grieving children and pay for your funeral? Will they have enough to pay off the mortgage, afford the monthly bills, fund university, keep your wife's head above water now and in retirement?

Will they be left with little, have to sell the house, your wife work full time and be very stressed, will debts build up, your children have no holidays and move away from their friends, etc.

Do the same for if your wife died and see what you'd have and what you'd need.

I don't think the nhs does life insurance but if she's in the pension scheme you and your children may get a lump sum if she dies while still employed, and get a pension for life and for the children until they are adults. However these amounts are probably based on what pension she has built up so could be small.

My husband and I are a bit older but with similar aged children and similar salaries. Should I die my death in service will pay out over £100k. My DB pension will pay my husband £7k per year and will give the roughly £4k each until adulthood. We have enough life assurance to pay off the mortgage, and the amount doesnt reduce so each year more will be leftover. Once retired my huband also has his own pension to add to what mine pays him. So they should all be set, he wouldn't even need to work for a bit and could then stay part time to care for the children. I would get a lower lump sum and annual pension should he pass, but my earning potential is greater and it will be a help. Plus the life assurance will take care of the mortgage.

We also need to consider what the children will get should we both pass away. Those caring for them will need funds to raise them along with their inheritance. So the life assurance, two death in service amounts and two child's pensions until adulthood, along with our savings and equity in our home will hopefully be enough. However should we leave our employers and no longer have a death in service cover then we may choose to increase our life assurance amount as these things should be assessed with a change in circumstance.

GunJack

hugheskevi wrote: »

Classic death-in-service is 2*salary.

Oops, yes, well-spotted on they typo

westv

My current private sector DIS is 16x salary so far better than the CS.