Value Protection (sometimes known as annuity protection or capital protection) is an option that returns a lump sum if the annuitant dies before their 75th birthday, giving the ability to protect a percentage of the pension fund, right up to 100%.
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 35%.
Points to Consider
- Provides a return of money to the client’s nominated beneficiary should death occur before age 75.
- Protect up to 100% of your pension fund.
- Available on a single or joint life basis
- Dying after age 75 will result in no lump sum being paid.
- Any lump sum will be taxed at 35% 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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