Beneficiaries

Who should receive your payouts when you pass away?

Designating beneficiaries is about deciding on who should receive any payouts from your pension plan when you pass away. When you designate beneficiaries, it is up to you exactly who should receive all or part of the money. If you do not designate any beneficiaries, the money will be paid out to your "next of kin".

Who should receive the money from your pension plan?

Your pension plan is not part of the regular inheritance like the rest of your assets are. Therefore, it is important that you consider your options and decide who of your dependants should receive any payouts from your pension plan. Many people in Denmark risk that their money ends up with others than the ones they had intended simply because they have not decided on who should receive any payouts from the pension plan - the so-called beneficiaries.

You can see your possibilities of changing your designation of beneficiaries on your plans by using the self-service tool at My PFA. If you need advice on beneficiary designation, please contact us at +45 70 12 50 00. Please be aware that:

  • If you have a connection to Greenland and want to change the beneficiary designation on your policy, please call PFA’s Advisory Services Centre at +45 70 12 50 00.
  • If you are insured through Letpension and want to change the beneficiary designation, please contact your financial institution.

 

Spouse’s/domestic partner’s pension
If you have a spouse’s/domestic partner's pension, it will, after you have passed away, be paid out regularly to your spouse, former spouse or domestic partner. However, pension payouts cannot be made to your domestic partner if you are survived by a spouse or former spouse that is entitled to the pension. A registered partner is considered equivalent to a spouse.

Special conditions must be met in order for someone to be entitled to this type of pension. Therefore, you cannot designate a beneficiary to a spouse’s/domestic partner’s pension. If you want information about the special conditions that apply to this type of pension, please call PFA's Advisory Services Centre at (+45) 70 12 50 00.

 

Who can you designate as beneficiary?

When you designate a beneficiary, you need to know if the payments to your insurance are tax deductible.

Tax deductible insurance plans (tax codes 1, 2, 3 and 33)
You can designate your:
- Spouse/registered partner
- Separated or divorced spouse/registered partner
- Children and their descendants (heirs of the body)
- Stepchildren* and their descendants
- Domestic partner (a partner you live with at the time of designation) 
- Domestic partner’s children and their descendants
- "Next of kin"
- No designation of beneficiary, which means that the payout will be made to the estate
* Your spouse/registered partner’s own children (also after separation and divorce)

Non-deductible insurance plans (tax codes 5 and 7)
You can designate who you want as your beneficiary, for instance your parents or a charity.

 

Legal heirs challenging the will

In certain cases, your legal heirs— i.e. your spouse and heirs of the body – will be able to object to a payout made to an designated beneficiary. The Danish bankruptcy court will determine whether the will is unfair.

As a starting point, your pension plan is established with your next of kin as the standard beneficiary, meaning that, in the event of your death, we will pay out the money from your life insurance cover to your "next of kin".

Who are your "next of kin"?

The concept "next of kin" has two definitions. Which definition that applies to your pension plan depends on whether your pension plan (policy) and beneficiary designation were established before or after 1 January 2008:

 

"Next of kin" – pension plans established AFTER 1 January 2008 (new rules)

In order of priority:

- If you do not leave a spouse/registered partner: domestic partner that you live with as if you were married and for which one of the following applies:
         a. At the time of death, you have been living together for two years.
         b. At the time of death, you are living together and have, have had or are expecting a child together.
- If you do not leave a spouse/registered partner or domestic partner: heirs of the body, i.e. your children, grandchildren, etc.
- If you do not leave any heirs of the body: heirs according to will
- If you have not drawn up a will: other heirs according to the Danish Inheritance Act (parents, grandparents, etc.)
- If no heirs exist, the money will be paid to the estate.


"Next of kin" – pension plans established BEFORE 1 January 2008 (old rules) 

In order of priority:

- If you do not leave a spouse/registered partner: heirs of the body, i.e. your children, grandchildren, etc.
- If you do not leave any heirs of the body: heirs according to will
- If you have not drawn up a will: other heirs according to the Danish Inheritance Act (parents, grandparents, etc.)
- If no heirs exist, the money will be paid to the estate.

 

If this is how you want the order of priority to be , you do not need to take any action.

Separate property and tied-up funds

If you have special wishes regarding how your life insurance payouts should be managed after your death, you have the following options.

   

Separate property

You can decide that the payout should be separate property of the beneficiary. Among other things, this ensures that the beneficiary is not to share the payout in the event of separation or divorce.

Tied-up funds

If you believe it best for a designated beneficiary not to have access to the payout until a certain age, you can choose to tie up the funds. This also means that the payout will be separate property of the beneficiary.