Value Protection (sometimes known as annuity protection or capital protection) is an option that returns a lump sum if the annuitant dies without having received the full value of their pension fund, giving the ability to protect up to 100% of the
original pension fund.
The lump sum payable on death is the percentage of the pension fund that is protected, less the total gross income already paid to the annuitant(s) as an income. The lump sum, if paid, will be taxed, currently at the rate of 55%.
Points to Consider
- Provides a return of money to the client's nominated beneficiary in the event of the client’s death
- Protect up to 100% of your pension fund
- Available with or without a Dependant's Pension selected
- If the total gross income paid exceeds the protected amount, no lump sum will be paid
- Any lump sum will be subject to tax, currently at 55%, before it is released to the nominated beneficiary and is not normally counted as part of the estate for inheritance tax purposes
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