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        0808 189 0463

        Updated: April 17, 2024

        Pension Life Insurance

        What's the difference between a pension and life insurance, and can they be combined for comprehensive protection? Read this article to find out

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        We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in life insurance. Ask us a question and we'll get the best expert to help.

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        Making plans for the future is an important part of your personal financial planning. But it’s not just about making arrangements while you’re alive.

        Thinking about what happens to your money and assets after you’ve gone is especially crucial when you have a family or other dependents. Life insurance can give you this security and as part of your cover, you can include life and pension insurance.

        In this article we’ll explain what you need to know about pension and life insurance, including the following:

        What is the difference between a pension and life insurance?

        Pension and life insurance are two different products and though some providers may offer combined cover, it isn’t always the case. So it’s best to understand what they both are to help you decide which type of cover to take out.

        • Life insurance: The benefits of life insurance come into use once you pass away and it means that your family will be financially looked after.
        • Pension: Your pension will vary according to the type you have but typically it involves your employer, if you have one, putting away money each month along with your own contributions that you’ll use in your retirement.

        Speak to a expert today

        Can you get life insurance with a pension scheme?

        You can take out life insurance that has pension benefits, but not all life insurance comes with it, it may be additional cover that you have to request.

        What’s included in pension life cover?

        Cover will vary according to what you take out but it could include the following:

        • A lump-sum payment to your spouse if you die before you’ve drawn your pension.
        • Leaving a ‘financial gift’ after you’ve gone to family, friends or charity.
        • Funds to pay for the cost of your funeral.

        Should I take out life insurance or a pension?

        Most people find that they need both life insurance and a pension. A pension, for many people, is vital to ensure you are able to meet your costs in retirement.

        Life insurance is important if you have dependents of any kind who are reliant on you financially. The right life insurance cover can give you and your loved one’s peace of mind that if you die unexpectedly, they won’t be faced with financial difficulties at the time when they are also grieving.

        Some people find it useful to combine the two, and if you make an enquiry, the experts we work with can help you decide whether this is a viable option.

        Should I take out a pension plan with life insurance?

        The benefits of life insurance are experienced after you’ve passed away so it’s really only recommended for people who have dependents such as children, a spouse, ageing parent, sibling or other relative to whom you make a financial contribution. If you don’t have any dependents it’s unlikely to be useful to take out a pension plan with life insurance.

        How can I take out a life insurance pension plan?

        You can take this type of plan out from a life insurance provider or you can opt for a pension plan that has life insurance benefits, in which case talk to your pension provider and find out if this is something they can arrange.

        Both providers will base the cover they offer you on particular criteria, including:

        • Your age
        • Lifestyle habits
        • Medical history

        The life insurance and pension provider will both take these into consideration to offer a plan they feel best suits you.

        It’s worth shopping around for quotes to ensure you get the best deal. If you’d like to discuss your options with an expert, speak to a professional pensions advisor by making an enquiry with us – we’ll introduce you to one for free.

        Speak to an expert about life insurance and pensions?

        Before you make a financial decision that will have a major impact on your future, it’s recommended that you discuss all the options with an expert first.

        If you need help finding a pensions advisor, give Online Money Advisor a call today on 0808 189 0463 or make an enquiry

        We’ll match you with one of the independent advisors we work with. They’ll be able to answer all your questions and help you arrange the most suitable life insurance or pension product for you.

        The service we offer is free and there’s absolutely no obligation.

        Ask A Quick Question

        We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in life insurance. Ask us a question and we'll get the best expert to help.

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        Pete Mugleston

        Pete Mugleston

        Mortgage Expert, MD

        About the author

        Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

        Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

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        FCA Disclaimer

        *Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

        Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.