Pension term assurance or PTA is a type of assurance plan that are availed by people who want to settle everything when they are gone. This type of insurance is available in UK and they are usually availed by persons who are now aging. This type of insurance could be compared with life insurance but comes with a lot of restrictions.

These restrictions however are based on the fact that pension term insurance cannot be combined with other types of insurance. But PTA is one of the most affordable types of insurance. As long as you are paying within the term, your beneficiaries will be receiving a good amount of money that you left behind.

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A Day – August 1, 2007

Before August 1, 2007, PTA was very attractive since aside from the fact that you will be paying less for a good PTA plan; it could also be used as a tax cut. Unfortunately, this was revised by the government making the plan simpler for applicants and policy holder.

As a result, PTA contributors will no longer enjoy tax cut through their PTA. This has decreased the application for PTA significantly even though they are still an attractive type of assurance plan.

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Payment Terms and Coverage

PTA could be paid in two ways – either monthly or annually. There are no significant differences for the payment terms but it could be easier if you pay them monthly since PTA could be automatically taken out of your monthly paycheck. Since the insurance is affordable, most will barely notice the reduction of their salary.

When the policy holder dies, the beneficiaries could receive money in two ways. They could also receive them as a lump sum or receive them monthly.

On the other hand, the policy holder will also have an option not to direct the money they are qualified for to their properties, instead of beneficiaries.

With the use of their PTA, they could pay for their mortgage and other type of loans. Since they are paying for their mortgage when they are already expired, the beneficiaries of the property will enjoy the house without even paying for a single cent in mortgage.

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Who Can Qualify

Anyone under 75 years old could qualify for this type of assurance plan. As long as they have the ability to earn, they are qualified to this type of assurance plan. This type of assurance plan could be taken as early as possible so that more benefits will be directed to family members. But this type of insurance is not thought of individuals who are at young age. They are usually taken at a later age – usually at the age of 50 or even 45.

One consideration though is that the amount that the beneficiary will receive is bigger when started earlier. The regular pension plan will still be enjoyed by the individual while paying for this type of assurance. It cannot be taken out automatically and should be contributed voluntarily.

If you care for the people you’ll leave behind, this type of assurance plan will work best for you. It’s not expensive and terms could be changed to your preferences.