Pension Term Assurance

Life Insurance with tax relief.

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What is Pension Term Assurance?

Pension Term Assurance is a special type of Life Insurance policy. It consists of two different options:

Pension Term Assurance works the same as any Life Insurance policy. It pays out a lump sum should the policyholder die during the term of the policy.

However, it differs from a normal Life Insurance policy as you may be eligible to claim tax relief on the premiums.

How does Pension Term Assurance work?

Pension Term Assurance does not require the policyholder to have a pension. Its purpose is to provide Life Insurance for those in non-pensionable employment.

It is suitable for those looking to cover up to retirement age. The type of policy you choose will determine how tax relief is applied.

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Types of Pension Term Assurance

Within Pension Term Assurance you have two options. Personal and Executive Term Assurance.

Personal Pension Term Assurance

Personal Pension Term Assurance is available for those who are self-employed and pay income tax under Schedule D.

It is also an option for those in non-pensionable employment. It offers policyholders the security of knowing a lump sum will be payable to their estate should they die.

One of the major benefits of putting Personal Pension Term Assurance in place is the tax relief on premiums.

Tax Relief on Personal Pension Term Assurance

Once a Personal Pension Term Assurance policy is live, the policyholder may be eligible to claim tax relief at their marginal rate.

Eligibility for claiming tax relief is based on your age and relevant percentage of “net relevant earnings” allowable for tax relief purposes.

Your age and earnings will directly correlate with your tax relief eligibility threshold.

These thresholds mirror those associated with a personal pension or PRSA.

The table below outlines the thresholds.

Age of policyholder

Maximum % of relevant earnings allowable

Up to 29 years of age












Below we look at how tax relief on your premiums is calculated. We apply tax relief to those on the lower tax rate (20%) as well as those in the higher bracket (40%)


20% – tax rate

40% – tax rate

Total cost of premium



Tax Relief



Net cost of premium



The tax benefits shown above illustrate why Personal Pension Term Assurance is greatly popular among self-employed individuals.

Standard Life Insurance vs Personal Pension Term Assurance

Claiming tax relief on a standard Life Insurance policy is not an option. Therefore, where possible, many people opt for Personal Pension Term Assurance.



Tax Relief

Real Cost of Premiums

Standard Life Insurance Policy




Pension Term Assurance




The ability to claim tax relief at your full marginal rate is a huge benefit associated with this type of policy.

If you are self-employed and considering your options, it may be worth contacting our team

Executive Pension Term Assurance

Executive Pension Term Assurance is a Life Insurance policy paid by the employer. Also known as Death in Service. It is becoming a regular perk in many occupations.

These plans are an additional benefit provided to employees. They provide the security of a financial pay-out should they die whilst in that employment.

The cover will last until the employee either retires or leaves service.

The maximum pay-out is usually a multiple of the employee’s salary. For example, four times the deceased final remuneration.

However, there is a limit as to how much can be paid in the event of an employee’s death. The lump sum cannot be in excess of four times salary.

Any benefits in excess of this amount can be used to provide a pension for the beneficiary.

In the below example, we look at two Executive Term Assurance payments.

Employee A





Additional Benefits

Death in Service (4 times salary)



Death in Service (5 times salary)



The additional benefits in the second example must be used to provide a pension. This €55,000 can be used to purchase an annuity or purchase an Approved Retirement Fund (ARF)

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An annuity provides a guaranteed income for a set period of time or for life depending on the policy conditions. The amount of money offered will directly correlate with the annuity offered.
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Tax relief on Executive Pension Term Assurance?

As the employer pays the premiums, they can be treated as a tax-deductible expense and offset against any corporation tax liability.

As of 2022, corporation tax is at 12.5% in Ireland. The cost of having Pension Term Assurance in place for employees can be offset against this tax bill.

Executive Pension Term Assurance gives employers the opportunity to offer a valuable benefit to employees while claiming tax relief.


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Where can you take out Pension Term Assurance

Using an experienced broker such as emero will allow you to compare the market. We work alongside Ireland’s leading insurers.

This means we can compare the benefits associated with each provider and ensure you get the most suitable cover.

ProviderOffer Pension Term Assurance
AvivaYes ✅
Royal LondonYes ✅
ZurichYes ✅
New IrelandYes ✅
Irish LifeYes ✅

Although Pension Term Assurance is offered by all of Ireland’s main providers, each provider offers different additional benefits.

It is important to understand the nuances associated with each before taking out a policy.

How much does Pension Term Insurance cost?

The cost of your premium will depend on some variables. The most significant factors are:

  • Age – The older you are the more expensive your monthly premium will be.
  • Smoking status – Smokers can be upwards of 50% extra on their premium.
  • Sum Assured – The larger amount you choose to insure, the higher your premiums.
  • Health status – Any existing or pre-existing medical conditions may impact the cost of your premiums.

Below we look at some examples of the cost of Pension Term Assurance. We increase the age of the applicant in 10-year increments. All other details remain unchanged.

The applicant is a non-smoker and the sum assured is €350,000.

Age of Applicant

Monthly Premium

Percentage Increase










The above increases show the impact your age will have on the cost of your premiums.

Compare Pension Term Assurance Quotations

At emero, we compare Ireland’s leading Insurance providers.

Advantages of Pension Term Assurance

Choosing to put Pension Term Assurance in place has many advantages. These include:

1) Tax relief

This is seen by most as the greatest benefit of putting such a policy in place. With Personal Pension Term Assurance, premiums are eligible for tax relief at your marginal rate.

However, for tax relief to be granted, it must fall within the Revenue guidelines.

With Executive Pension Term Assurance, premiums paid are not treated as income in the hands of the employee and therefore are not taxed.

The premiums are usually a deductible expense for the employer and offset against corporation tax.

2) Covers you should you die during working life

Pension Term Assurance is designed to be in place and run parallel with your working life.

Should the premiums be paid continuously, you will be covered until you reach retirement age.

3) Peace of mind

A major benefit of putting any Life Insurance policy in place is the peace of mind it offers. Pension Term Assurance is no different.

Protecting your loved ones financially should anything happen.

4) Cost effective

Considering the multiple benefits it offers, Pension Term Assurance is cost-effective. It covers multiple bases in one policy.

Combined with the fact it offers tax relief on both the personal and executive options.


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Disadvantages of Pension Term Assurance

Some of the below could be seen as the disadvantages or drawbacks associated with such a policy.

  • Cannot be used as security for a mortgage or loan
  • Available as a single-life plan only
  • Does not accumulate a value
  • Only accessible to those with specific employment status

Although the above should be outlined from the outset to any individual considering a policy.

Are there restrictions on Pension Term Assurance?

Revenue has imposed certain restrictions on Pension Term Assurance policies. These include:

  • The policy cannot be used as security for a loan
  • The policy cannot be taken out on a dual or joint life basis

How emero can help you put Pension Term Assurace cover in place?

The first step of putting cover in place is to have a discussion and assess your options.

Once it is confirmed that Pension Term Assurance is the correct course of action, our experienced advisors can guide you through the process.

We are not tied to a single insurer meaning we can compare the market and provide you with impartial advice.

We understand that protecting your health and finances is important. Please feel free to contact our team with any questions you may have.

We look forward to hearing from you.

Key Takeaways

  • Pension Term Assurance is for those in non-pensionable employment. This can be those who are self-employed or a PAYE workers.
  • Tax relief is available on contributions.

There are two types of cover:

  1. Personal Pension Term Assurance
  2. Executive Pension Term Assurance
  • Your age will impact the cost of your premiums.
  • emero can assist you in comparing Ireland’s leading insurers.
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