If you have a workplace pension that includes life insurance, the life insurance pays out either a lump sum or regular payments on your death, giving your dependants financial support after you’ve gone.
The amount of money paid out depends on the level of cover you buy.
You decide how it’s paid out and whether it will cover specific payments – such as mortgage or rent – or if it’s to leave your family with an inheritance.
This might be provided by the pension scheme or through an insurance policy purchased by the employer, or both.
The amount of life insurance paid out depends on a number of factors, including:
- the type of pension scheme you belong to
- whether you're an active member of the scheme (still contributing to it or working for the same employer)
- whether you've reached the selected retirement age or started taking your retirement benefits.
So it’s important to check and understand what applies to you and when this might change.