What is survivors' annuity insurance and how does it work?

What will your partner receive when you are no longer here?

You build up a pension for later, but what happens to that money if you pass away sooner? Fortunately, your accrued assets are not simply gone. Through a survivor's annuity, your partner can receive a monthly payment from your pension pot. In this blog, we explain how that works, how much survivor's pension your partner can expect, and when that payment commences.

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What is a survivor's annuity?

A survivor's annuity is a monthly payment that your partner or heirs receive from your accrued annuity capital after your death. It is not an insured amount, but rather the capital that you have built up yourself through pension investing. With a pension account, such as with Vive, the accrued capital is, in principle, retained for your survivors. They cannot withdraw it in one lump sum, but must have it converted into a periodic payment. They then pay income tax on that payment in box 1.

This is different from the ANW benefit from the government or a survivor's pension through an employer. Those schemes are completely separate from your own pension pot. A survivor's annuity originates from what you have paid in and built up yourself.

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How much survivor's pension will your partner receive?

The level of the survivor's annuity depends on a few factors: the value of your accrued capital, the chosen duration of the payment, and the interest rate at the time of conversion. A calculation example: with capital of 100,000 euros and a payment duration of twenty years, your partner can expect around 400 to 500 euros gross per month. This is indicative and varies per situation, but it does give an idea of what is possible.

The more you build up during your life, the higher the payment for your survivors. This makes starting early with pension investing important not only for yourself, but also for the people you leave behind. Via the annual allowance calculator, you can calculate how much you can contribute with tax advantages.

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When do survivors receive the pension?

When the survivor's annuity commences depends on the moment of death. If you pass away during the accrual phase, your accrued capital is transferred to your partner or heirs. They then arrange the conversion into a payment, after which the monthly payments can commence. If you pass away during the payment phase, it depends on the chosen form: with a temporary payment, the remaining instalments continue to your survivors; with a lifelong payment, the payment may stop, unless a partner continuation has been agreed. 

With Vive, your pension account is always personal and portable. After death, your survivors can gain insight into the value of the pension pot through digital processing, without lengthy procedures.

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Why this matters

Building up a pension is not just for yourself. It is also a way to give your partner financial security if you are unexpectedly no longer here. Unlike some employer schemes, your accrued capital in a personal pension account remains available to your survivors in many cases. What you have contributed benefits the people who are dear to you.

Want to know more about how pension investing works? Read more on the page about pension investing or discover the possibilities for self-employed professionals and entrepreneurs.

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