Repayment cover is a type of surviving dependants’ benefit/surviving dependants’ pension that ensures that your family members receive your pension capital in the event of your death. Usually this is done through a monthly payout over a certain number of years.
If you do not have repayment cover, your pension capital will not be paid to your family members but instead be distributed among other policyholders (so-called inheritance gain) that also lack repayment cover. The advantage of not having cover is precisely that you get so-called inheritance gains when other people in the insurance collective (without cover) die. Inheritance gains are given to people of the same age in the form of a percentage on the pension capital, usually they are therefore very negligible before you reach the age of 60-70.
The cost of having repayment cover is either very low or completely free of charge. This is due to the construction of the insurance and differs between various companies (for some insurance the cover is 101 % of the pension capital which means that you as the policyholder must pay for the risk that the insurance company will have to pay the extra percentage). The cost is normally charged automatically and is therefore not something you as a policyholder need to think about.
Due to the low/non-existent cost, it is common that people with a family have repayment cover. It helps the family during the tough period when they have to restructure their finances, sometimes it can for example be crucial in order for them to be able to stay in their home. On the other hand, it is unnecessary to have repayment cover if there is no family that needs your pension capital, then you can instead get inheritance gains.
The circle of beneficiaries for pension insurance is governed by the law and is relatively narrow. Possible beneficiaries are: spouse/registered partner/cohabitant as well as children (including foster children) of the insured. If you have pension insurance with Nordea, changes concerning repayment cover and beneficiaries are made through contacting Nordea.
If you have your pension in Nordnet changes for repayment cover and beneficiaries are made at the specific company, go to www.nordnet.se for more information.