Pension Term Assurance:

Stand-alone Pension Term Assurance (PTA) is term insurance which uses the rules for pension schemes to provide life cover. Despite the name, this does not have to form part of your pension. It pays out on your death rather than giving you an income in retirement.

PTA won't necessarily be called pension term assurance; firms can use their own marketing names for it, so make sure you read the policy documents and understand what you're buying.

Changes to the tax rules in 2007 means that stand-alone PTA no longer has a tax advantage over ordinary term insurance products. However, if you already have a PTA policy that gets tax relief you will not be affected. If you are considering PTA, you should also look at ordinary term insurance and decide which product best meets your needs.

If you have an existing policy where you can increase your cover by paying higher premiums, you will still get tax relief on those increased premiums. However, if your policy doesn't include this option, you won't be able to increase cover and get tax relief on higher premiums.

Gets a little confusing soesn't it? Well, thats what we are here for at IFMS. We can advise you to make sure you choose the appropriate type of cover at an appropriate level over a suitable period designed to meet your own specific needs. This ensures you get the most cost effective cover for you and ensures you are not paying for any unnecessary features.

You should also consider adding cover for Critical Illness for a far more robust protection solution should you perhaps suffer a heart attack or stroke that prevents you from working for an extended period.A lump sum or regular income following such an event once a successful claim has been processed will serve to relieve you from stress and strain that follow such a traumatic event. If sufficient cover has been arranged your mortgage could be repaid and a tax free lump sum provided for living expenses.

For more information please click here.*