Select Your Cookie Preferences

We use cookies and similar tools that are necessary to enable you to use our website, to enhance your experience, and provide our services, as detailed in our Cookie Notice. We also use these cookies to understand how customers use our services (for example, by measuring site visits) so we can make improvements.

If you agree, we'll also use cookies to complement your website experience, as described in our Cookie Notice. This may include using third party cookies for the purpose of displaying and measuring interest-based ads. Click "Customise Cookies" to decline these cookies, make more detailed choices, or learn more.

Nine in ten employers offer death-in-service benefits

Almost nine in ten (89%) employers offer death-in-service benefits and the average company pays out between one and two years´ salary, according to research by Direct Line Life Insurance.

This amounts to between £27,600 and £55,200, and — while the payout is a welcome boost — the insurer warns that for many families it would not be enough to cover their outstanding mortgage balance.

In fact, the average death-in-service benefit would leave a mortgage shortfall in the region of £67,678.

What´s more, there can be a time lag for families receiving the money, with 14% of HR directors surveyed reporting that funds can take up to three months or more to be paid out.

“This could leave families in a financially vulnerable position, especially having lost an income, adding extra pressure at an already emotional and difficult time,” said Jane Morgan, business manager at Direct Line Life Insurance.

The research also found that almost a third (32%) of employers do not automatically pay death-in-service to a nominated individual; instead the funds are paid into a discretionary trust which means the company decides who will benefit.

And 18% believe death-in-service is a direct replacement for life insurance, despite coverage levels typically being far lower and people not being covered if they are between job roles.

“Life insurance is not something anyone wants to think about,” Morgan continued. “It´s easy to say ‘I´ll think about that later´ or put it off for a rainy day, but it´s important to be prepared for your financial future, no matter what life may bring.”

Posted on June 25th 2018

Loading... Updating page...