Standard Life launches Pension Term Assurance

Standard Life has unveiled its new Pension Term Assurance (PTA) product, which takes full advantage of the tax relief available on payments allowing savings of anywhere between 8% and 30% (depending upon tax status), when compared with conventional term assurance. The product is called Life Insurance with Tax Relief (LITR) and is available as both level and decreasing term cover and can be used for personal and mortgage protection.

LITR has a built in conversion option, which will allow policy holders to convert to a conventional life assurance plan with no additional underwriting if they are at risk of exceeding their pension Lifetime Allowance Limit.

Although the product is governed by pension legislation, under the new A-Day rules policy holders do not need to link the insurance to a pension to qualify fully from the tax relief on payments.

Trevor Matthews of Standard Life said, "The launch of Life Insurance with Tax Relief provides a very affordable opportunity for people to review their protection requirements and ensure they are adequately insured. Comparing single and joint life cover shows that people can double their level of cover using two single life policies while still saving money on payments."

For example, a non-smoking male aged 35 at outset seeking £100,000 of term assurance over 25 years would pay £9.27 a month, saving £19.32 if he was a basic rate taxpayer but the premium would come down to £7.13 for a higher rate taxpayer, offering an annual saving of £45.00!

Features of the product include:

* Automatic tax relief of 22%. Higher rate relief claimed back via self-assessment
* Accidental death benefit
* Serious ill health cover
* Free life cover for mortgage related applications

Level benefit plans can choose the following additional options without providing any further evidence:

* Lifestyle, where the level of cover can increase due to a change in lifestyle (marriage, starting a family)
* Increase, where the customer can choose to increase their level of cover every fifth anniversary by up to 25% (subject to a maximum of 100% of the original sum assured)
* Extension, where the customer can choose to extend the term of the policy on every 5th plan anniversary date
* Policies can be written under Trust allowing quicker payments to the estate on death subject to trustee approval and discretion over to whom to pay the benefit.

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