If you lose your job, it is a good idea to check your pension scheme as your dismissal may involve a decline in your expendable income for a period of time. You can for instance choose to maintain your insurance policies while suspending your pension contributions.
Make a decision within three months
If you take no action within the first three months, your pension scheme will be suspended, and your insurance cover will either be reduced, or your insurance policies will no longer be valid. This means that your pension savings do not grow and that you might have insufficient insurance cover. It is therefore a good idea that you decide what to do with your savings and your insurance policies before the expiry of the three-month period.
You can maintain your pension scheme
Within the first three months of unemployment, you can choose to maintain your pension scheme and your insurance policies by continuing your premium payments. The advantages of establishing a Continue Personal Pension Scheme are that it is cheaper to establish than a new scheme and that you avoid disclosing your medical information to us once more.
Continue group life insurance
If you have a group life insurance policy and become unemployed, you have a continuation option under the scheme. The advantages are that you can continue your occupational pension scheme as a personal customer and that you may be exempted from contributions into the pension scheme for a period up to one year. You can also choose to maintain your insurance policies and suspend your premium payments for up to one year. To do so, however, your savings need to be large enough to cover the outstanding premiums. The reason is that we deduct the outstanding premiums from the value of your aggregate savings.
From occupational to personal
If you have taken out insurance against loss of earning capacity, critical illness insurance and Danica Health Insurance, you can also maintain these policies as a personal customer although your previous employer cancels your occupational pension scheme.
If you have to choose between continuing your pension scheme contributions or your insurance premium payments, you should choose to maintain your insurance policies to offer continued financial protection for yourself and your dependents if something happens to you. You can then suspend pension scheme contributions into your pension scheme until you have started a new job.
Talk to us
Talk to us for advice on your options. You are always welcome to call us or write to us, and we will be pleased to advise you on how to make the most of your pension savings and insurance policies if you lose your job.