End of year tax-planning – don’t leave Protection off the table

Pension Term Assurance (PTA) is hugely underused as a product offering – perhaps people feel it’s more complicated than traditional life cover options, but in reality, it’s not. All PTA does is allow your client to provide financial security to their loved ones and avail of tax relief at the same time. This unique feature of PTA qualifying for tax relief means your client can secure life cover for significantly less than the cost of a standard Term Protection policy (see the table below). Alternatively, your client could obtain a higher level of cover for the same amount they had already budgeted. 

There are two types of PTA: Personal and Executive.

Pension Term Assurance - Personal

With Personal cover, the client takes out the policy in their own name. They pay the premiums themselves and can claim tax relief on their premiums. It’s available to clients who are self-employed (Schedule D - Case I or II) or in non-pensionable employment (Schedule E).

Eligible clients may include self-employed professionals—such as accountants, solicitors, and doctors—as well as those running their own trade independently, like farmers, self-employed contractors, and employees in roles without pension provision.

Tax relief

Clients can claim income tax relief on their Personal PTA premiums. This means that the real cost of life cover will be significantly lower compared to regular Term Protection as shown in the table below.

The example below shows simulations of monthly premiums for different sums assured for a 40-year-old accountant (non-smoker) for a 24-year term with a marginal tax rate of 40% and shows the impact the tax relief can have on the cost of cover. Premiums include the 1% insurance levy as at October 2025, this may change in the future.

The applicable limit for tax relief covers both the contributions your client makes to their pensions and their PTA premium. This means the combined contributions need to remain within Revenue’s generous age-related contribution limits and earnings limit.

Let’s look at an example:

Clodagh (54) is a self-employed accountant earning €125,000 in 2025. She’s already putting €25,000 a year into a Personal Retirement Savings Account (PRSA). Her tax relief is capped at 30% of €115,000, which totals €34,500. As €25,000 is already accounted for, she can claim income tax relief on extra pension contributions and Pension Term Assurance premiums in 2025 to a maximum of €9,500.

Pension Term Assurance - Executive

In the case of Executive Pension Term Assurance, the policy is taken out by a company for an employee (in other words, the company pays the premiums). It is arranged under a one-member occupational pension scheme and is available to employees whose employer wishes to put such an arrangement in place.

Tax relief

Employers can claim corporate tax relief on the premiums they pay for Executive PTA when filing their annual accounts. The relief only applies to premiums paid during the specific accounting period.

Maximum Lump Sum

Revenue has set rules about the maximum death-in-service lump sums allowed. These limits apply to all pension schemes linked to the same employment but can also be affected by retained benefits from previous employment pension schemes. The maximum allowable death-in-service lump sum equals four times the employee's final salary. It is possible to cover a sum assured above this limit, but the leftover funds above this limit will be used to arrange a pension or an ARF (Approved Retirement Fund) for their spouse or dependants.

Let’s look at another example:

Noah earns €100,000 a year. If Noah passes away, his Death-in-Service benefit is 6 times his salary (€600,000). Noah has no other retained benefits relating to his current or present employment. The most his spouse can get as a lump sum is 4 times his salary (€400,000). The remaining €200,000 must be used to provide a pension or an ARF for his spouse/dependants.

Ensure enduring protection with Zurich’s Protection Continuation Option

Many people change jobs or employers several times over the course of their career. However, moving to a different job or switching careers does not need to mean the end of their PTA cover. By including a Protection Continuation Option in the policy, they can convert an Executive PTA policy into a Personal PTA policy (if the applicable conditions for tax relief are being met) or into a regular Term Protection policy. If a client becomes ineligible for tax relief on their Personal Pension Term Assurance, they can continue their protection with a regular Term Protection policy—without needing further medical evidence—which will not qualify for tax relief but will still enable them to maintain valuable protection for their family. 

What’s the difference with regular Term Protection?

Both types of cover offer financial protection on the life of the life assured, but Pension Term Assurance has a few additional requirements, which must be met to qualify for tax relief.

• Life cover only - Pension Term Assurance provides life cover only and cannot include additional benefits, such as Serious Illness or Cancer cover.
• Single Life only - Pension Term Assurance can be taken out as Single Life only.
• A PTA policy cannot be assigned as security, for example, for a mortgage loan.
• Maximum term - The maximum term is up to age 75 for personal policies, or up to the Normal Retirement Age (maximum 70) for executive policies. Regular Term Protection has no statutory maximum age. However, cover may continue in a regular term protection policy, if protection continuation is available.

In summary, Pension Term Assurance presents a compelling solution for individuals and businesses aiming to provide financial protection with the added advantage of tax relief. By carefully considering the options—Personal or Executive Pension Term Assurance—and their specific requirements, clients can significantly enhance their long-term financial planning.

The information contained herein is based on Zurich Life’s understanding of current Revenue practice and Zurich’s current product terms & conditions as at October 2025, which may change in the future.