It is important to have a plan for what will happen to your assets when you die. There is a lot to consider, which is why is makes sense to act ahead of time.
Perhaps you have already decided what should happen to your pension and insurance cover with PensionDanmark. If not, you should take a closer look into:
Perhaps you have already started payout of your pension, but if not, it may be a good idea to check your insurance cover on death.
If you die before payouts of your pension start, your savings will go to your beneficiaries. They will receive an amount after tax.
If the balance of your savings is low and you have cover on death, we will top up your savings so that your beneficiaries receive a minimum amount. This amount is typically DKK 500,000 – unless you have chosen a different amount.
If your savings after tax exceed the minimum amount, we will only pay out the savings balance.
You typically have three savings accounts and your savings will be paid out to your beneficiaries as follows:
Old-age savings
If you have not received the full amount of your old-age savings, your beneficiaries will receive the remaining amount. The payout is tax free.
Annuity pension
If you have not received the full amount of your annuity pension, your beneficiaries will receive the remaining amount. This will be paid out as a lump sum.
Lifetime pension
A pension insurance ensures that your savings are passed on to your beneficiaries when you pass away. Your beneficiaries will receive a single payout. The amount corresponds to the remaining savings if you pass away before the pension insurance expires. You can decide how many years the pension insurance should be valid, ranging from 0 to 22 years, depending on your age.
Imagine you choose a pension insurance period of 20 years:
You start receiving your pension payments but pass away after 11 years.
Your pension insurance is valid for 20 years, meaning there are 9 years left of the chosen period.
Your beneficiaries will receive the amount you would have received in pension for the next 9 years.
The money will be paid out to your beneficiaries in a single lump sum.
Tax payable to the state and estate tax
We deduct 40 percent tax payable to the state before an annuity pension or lifetime pension is paid out. If estate tax is due, this will also be deducted from all amounts.
If you have cover on death, it will be valid for up to five years after contributions have stopped or until you reach state pension age.
This is the minimum amount your beneficiaries are guaranteed to receive.
If you leave savings of, for instance, DKK 300,000 after tax, we will make a top-up contribution of DKK 200,000 ensuring that your beneficiaries receive DKK 500,000 after tax.
If your savings after tax exceed the minimum amount, your beneficiaries will only receive your savings
Thankfully, no one knows exactly what the future holds. But it is a good idea to decide who should make decisions on your behalf if you are no longer able to make decisions yourself.
A traffic accident or dementia may mean that you are unable to make decisions yourself.
A lasting power of attorney allows others to make decisions on your behalf if you are unable to make decisions yourself. For example:
If you are a member of PensionDanmark, you can prepare a lasting power of attorney and get free advice from Lexly.
All you have to pay is a notary fee of around DKK 300
