4.7.4 Waiver of Premium Benefit
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This option is used to offset the problem of long term disability
preventing payment of premiums.
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When a claim is made, the life office will treat the policy as
if the premiums are still being made. The waiver option therefore
is underwritten and an additional loading is imposed on the premium.
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It is not possible to include waiver of premium benefit within
personal pensions set up on or after 6th April 2001. However, it
is possible to arrange a separate non-pension contract. Tax relief
will not be give on the premiums but alternative benefits, e.g.
unemployment cover, can be included. The waiver benefit will not
have to be paid directly into the contract, it will be paid to the
member. The member could then choose to pay the benefit into the
pension plan and obtain tax relief on this contribution.
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Personal pensions established before 6th April 2001 can include
waiver of premium benefit. The contributions used to fund the cost
of the waiver of premium benefit attract tax relief. The benefit
arising from such policies must be paid directly into the pension
plan by the provider
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