What is death in service insurance?
As mentioned earlier, death in service insurance is typically a part of an employment benefits package. It offers financial protection for your loved ones should you die while in service of a company. It can help to provide peace of mind, knowing that your family will have some financial assistance in the event of your untimely death.
However, it’s rarely as expensive as a traditional life insurance policy and there are a few risks that you must keep in mind when your employer offers you death in service cover. These include:
- Death in service is normally a multiple of your salary – whether this covers enough expenses or not depends on your family’s outgoings
- If you leave the company that provides death in service cover then you will no longer be protected
- You may not know who will receive this benefit if you die, as they often fall under a discretionary trust
- You cannot typically assign this benefit to cover mortgage payments
- If you take out life insurance at a later date, you may face higher premiums, due to your increased age or any health conditions you have suffered before opting for a life insurance policy
Since death in service is a benefit, the full details will vary massively depending on who your employer is and the overall value of your benefits package.