Providing for those left behind

3rd July 1998 at 01:00
One of the best ways of providing extra benefits for widows and widowers is to take out a Teachers' AVC (additional voluntary contribution) from the Prudential with a life assurance benefit if you die before retirement. The sum assured will be free from inheritance tax and, unlike other life assurance, you will also get tax relief on the premiums.

For Pounds 1,000 worth of cover, a man or woman aged 35 will pay 8p a month, while a 50-year-old man will pay 38p a month, and a 50-year-old woman 27p.

The Inland Revenue allows a tax-free death benefit of up to four times annual salary; as the Teachers' Superannuation Scheme will pay twice your annual salary to the family following death in service, your AVC life assurance must not amount to more than twice your salary.

If you die before retirement the full value of the AVC fund will pass to your dependants.

Another way to improve pension prospects for surviving spouses is to buy past added years. You can purchase any period of service as long as your total pensionable service will not add up to more than 40 years.

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