The individual(s) nominated by an employee to inherit their death in service lump sum (normally a spouse, partner or family member). This does not guarantee the benefits will be paid to the nominated individual(s). The lump sum is held in a trust and the trustees have absolute discretion over who the payment is made to.
The amount of money stipulated in a death in service insurance policy to be paid out if an employee dies.
A collection of benefits and perks offered by employers to attract and retain staff.
Business or corporate trust
A trust set up and run by a business to manage and administer an employee trust. For more information, see our ‘Considerations for employers when setting up a death in service insurance scheme’ section.
A request for a lump sum pay out under a death in service insurance policy when an employee dies.
Death in service insurance
An insurance policy taken out by an employer. It provides a lump sum payment if an employee dies while employed by the employer. For more information, see our 'What is death in service insurance?’ guide.
The total value of the deceased's assets including legal rights, interests and entitlements to property of any kind - less all liabilities and debts such as funeral expenses.
A perk given to employees which is not related to their salary.
Group life insurance
Another term for death in service insurance. An insurance policy taken out by an employer. It provides a lump sum payment if an employee dies while employed by the employer. For more information, see our ‘What is death in service insurance?' guide
The price paid for an insurance policy.
A person or business who arranges insurance cover with providers on behalf of their customers.
Level of cover
The amount of benefit that will be paid out under the policy.
Lifetime tax allowance
The total amount allowed in all of your registered pensions schemes (excluding your state pension) before you have to start paying tax is called the lifetime allowance. The charge payable on any value, when taken, above this is the Lifetime tax allowance charge.
A one-off payment made to the death in service insurance policy trustees when an employee dies.
A trust set up and run by a third party to manage and administer an employee trust. For more information, see our 'Considerations for employers when setting up a death in service insurance scheme’ section.
Nominee or nominated person
The person chosen by an employee to receive a lump sum payment under a death in service insurance policy, in the event of an employee's death. The scheme trustees will take this nomination into account when paying out a claim.
The employer who takes out death in service insurance as a benefit for their staff.
Factors providers look at to decide how much to charge for an insurance policy, such as postcode, and the industry a company works in.
Small to Medium Enterprise - generally a small or medium sized business.
A way of making pay outs under a death in service insurance policy straight to a nominated person (beneficiary), rather than to the deceased's estate. This usually means inheritance tax is not payable on the money. For more information, see our 'Considerations for employers when setting up a death in service insurance scheme’ section.
A person who is responsible for making decisions and administering a trust for the benefit of its beneficiaries.
If you want to find out more about death in service insurance take a look at our helpful death in service guides.
Tax rules and legislation can change, and the value of tax benefits depends on your individual circumstances. This information is based on our understanding in March 2020.