Pension Term Assurance - Hot Topics Q&A

Q. I've heard about Pension Term Assurance (PTA). What is it and how could it benefit me?

A. Available in it's new form from 6 April 2006, PTA is life assurance that pays out on death of the policyholder. The advantage to having this form of cover over any other is that you can qualify for tax relief on any premiums you pay if you're a taxpayer. So, if you're a higher rate taxpayer you can get a policy for approx £60 pm, that would cost you £100 pm with a normal term assurance plan.

Beware of anyone suggesting you simply replace your current plan with another. You need to compare what you're currently paying with any potential savings. 

Also, you may want to place your cover into trust so that you can potentially save any Inheritance Tax, therefore it's important that the company you choose has the right type of trust form. 

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