Death in Service Cover
Death in service cover is a death benefit that may be provided by your employer if you die while you are an employee of the company. It pays out a lump sum, of typically, 3 to 4 times your annual salary.
If you leave your company (redundancy, become self-employed, etc.) the cover ceases immediately.
It may also be possible for your employer to reduce or stop the death in service package.
There is therefore a risk in relying upon employer-provided death in service benefits, as continuation of the cover is outside the employee's control.
We therefore recommend that employer-provided death in service benefits be disregarded when quantifying the need for family life cover.
If you no longer have death in service cover and if your health is in any impaired, it may be difficult or impossible for you to get life cover.
By having your own pre-existing life insurance, this risk is completely removed.
Nevertheless, if a death in service benefit exists, a death benefit nomination should be completed, which indicates to the scheme administrators to whom they should pay the benefits in the event of your death. (This form is normally available from the employer’s occupational pension scheme administrator.)
