Emer has RAC valued at €60,000 and associated Pension Term Assurance policy for €100,000. If Emer died today, what TOTAL amount would be paid out between the two policies?

• A. €40,000
• B. €60,000
• C. €100,000
• D. €160,000

Answer: (C)

Think about how death benefits are structured when a RAC sits alongside a Pension Term Assurance. The term assurance is specifically there to provide a lump sum on death to replace the pension benefit that would have been paid. When death occurs, that policy pays its fixed amount, and the RAC’s own cash value isn’t paid out as an extra lump sum in addition to the term assurance in this setup. So the total amount paid on death is the sum insured of the Pension Term Assurance, which is €100,000. The RAC value of €60,000 would not be a separate addition in this scenario.