Life Insurance. Bargain Life Insurance When You Take Out A Pension Policy
At last, a real life insurance bargain but as always there are strings attached!
If you take out a new pension policy after 6 th April 2006 and within the same premium pay for life insurance cover, then you can use your pension contribution tax allowance to reduce the cost of your life insurance. This means if you’re a standard rate taxpayer, you’ll receive 22% tax relief on your life insurance premiums and relief at 40% if you’re a higher rate taxpayer.
The combined premium you pay for your pension and life insurance will automatically be reduced by 22% by the pension provider. But if you’re a higher rate taxpayer, you’ll need to claim the balance to bring your relief up to 40%, on your year-end self-assessment tax return.
But there are three strings attached:
The pension company must also provide your life insurance and be paid as one combined premium.
The current value of your pension fund plus the sum insured by your life insurance policy must not exceed 1.5 million.
Your combined annual premium for your pension...
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