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Q. At age 40 I am reviewing the amount of life assurance cover I need for my partner and family if

I die in the next 20 years. I have

read that the NHSPS provides benefits to dependants on my death. What are these?

A. The total amount of life assurance cover will depend on many factors such as current income, whether your partner works, how many children you have and whether you are planning private education.

The idea of life assurance is to provide a lump sum that can be invested for regular income and provide a sound capital buffer for your family.

As a very rough guide, you need cover of at least five times your annual income. It is assumed that your mortgage is already covered with suitable life assurance.

The current NHS scheme offers protection to your family. With death in service, an index-linked and enhanced spouse/partner pension and tax-free lump sum of twice your average annual superannuable earnings is paid. For the first three months after death (six months if there are dependants) a monthly payment is made equal to your equivalent monthly superannuable pay.

Assuming your superannuable earnings are around £95,000 your family would therefore receive a lump sum of £190,000, monthly payments of £7,900 for the first six months and then an index-linked pension based on your length of service at death. Given your current age and assuming you have two young children and 16 years of service to date, the enhanced pension would be worth around £30,000 pa. Your partner would receive half of this once your children left full-time education.

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