- What is death in service insurance?
Death in service insurance (also known as group life insurance) is an insurance policy that financially supports your employee’s loved ones by providing them with a cash lump-sum payment in the event of your employee’s death.
- Is death in service insurance the same as life insurance?
No. Death in service insurance is similar to life insurance in that both pay out after death, but they are not the same. Death in service insurance is sometimes offered as part of an employee benefits scheme when, as an employer, you will select the level of cover for your staff. Conversely, life insurance is typically purchased individually with the level of cover chosen by that individual.
- How much does death in service insurance cost?
This will depend on several factors such as the number of employees you wish to cover, the industry you work in, and the amount of cover you want your employees to have.
If you'd like to get an indication of how much it might cost to provide death in service insurance, you can use our quick quote service.
- How much will death in service insurance cost my employees?
It won't cost your employees anything as death in service insurance is a staff benefit, provided by you, the employer.
- How many employees will death in service insurance cover?
Most of the providers on our panel will quote for three or more employees, although one provider will cover two employees. There is no upper limit on the number of employees you can include in the scheme.
Please note, if you have more than 250 staff, getting quotes back from insurance providers will usually take longer.
- Is death in service insurance compulsory?
No, it is not compulsory to offer death in service insurance however by offering it there are a range of benefits which may be available for both employers and employees. You can find out more about these in our “What are the benefits of death in service insurance?” guide.
- Do I have to offer death in service insurance to all my employees?
No, you can choose which employees you would like to include in the scheme, although you should consider the Equality Act 2010 into consideration when making the decision on who to include.
This piece of employment law makes it a legal offence for employers to discriminate against their staff on various grounds, for example age and sex.
- Can I offer different levels of cover to different groups of employees?
Yes, but you need to have clear categories of employees to ensure you are not contravening the Equality Act 2010.
- What benefits will my employees get under a scheme?
This will depend on what level of cover you choose and the insurance provider you select. As a minimum, a lump sum will be paid in the event of their death. There may also be additional benefits such as bereavement support and probate services.
- Is death in service insurance taxable?
The premiums you pay for a death in service insurance policy are considered a business expense, which means you can deduct them from your profits before tax.
- What are the tax implications for my employees?
Any pay out under a registered death in service insurance policy is tax-free, so no inheritance tax is paid on it (subject to the lifetime allowance).
- Is death in service insurance a p11d benefit?
Death in service insurance is not usually considered a p11d benefit or benefit in kind.
- Will my employees have to undergo any medical tests?
Most providers won't ask for your employees to undergo any medical tests, but some might.
- What happens if an employee leaves my company?
Cover stops when someone leaves your business.
- What happens if I dismiss an employee?
As with employees who leave voluntarily, cover will stop if you dismiss a member of your staff.
- What happens when an employee reaches retirement age?
When you fill in the quote form, you will be asked to choose the policy end date for your employees’ cover, and once they reach that age, they stop being insured under the scheme. An employee may work beyond this age and therefore will not be covered.
- What if my employee wants to take a leave of absence from work, will they still be covered?
If a staff member takes a leave of absence from your business, cover is usually suspended for the time they are absent and reinstated when they return to work.
- What happens if someone dies and I have to make a claim?
Normally you will contact your death in service insurance scheme provider and advise them of the death. You'll be asked to fill in a claim form (some providers have an online claim service) which is then sent to the trustees of the scheme to be authorised. The trustees will then decide who should receive the lump sum payment. They will consider the expression of wish form if one has previously been completed by the deceased.
You can find out more by reading our guide ‘Death in service insurance: How to make a claim’ .
- How long does it take for death in service insurance to pay out?
The length of time it will take to receive a death in service payment will depend on the case and whether the trustee has all the necessary paperwork. Usually the process is complete within 30 days.
- How long does death in service cover last?
Cover lasts as long as you have a policy in place. You can cancel the policy at any time, or your insurance provider will cancel it if you do not pay the premiums, at which point cover will stop.
- What is the difference between a registered death in service scheme and an excepted scheme?
Both schemes are written in trust. A registered scheme allows tax-free lump sum payments up to the HMRC's Lifetime Allowance (LTA) and takes into account the death in service scheme and other registered pension schemes, whereas an excepted scheme allows payments to be made outside the LTA, but are subject to different tax rules.
An excepted scheme can be used by higher earners who have exceeded their LTA. They often run alongside registered schemes, but from a separate trust.
- Does Protect My People offer excepted death in service insurance schemes?
No, we only offer registered death in service schemes.
- Is death in service assurance the same as death in service insurance?
Yes. It's just down to how an insurance provider chooses to describe the product. 'Assurance' has a similar definition to 'insurance' for financial products, and so insurance providers may use both terms.
- I've already got a death in service scheme set up. Can I move it using Protect My People?
Yes, you can. Normally, companies review their scheme every two or three years when the guaranteed rate ends. Just enter your information into our quote form and you will receive new quotes in 10 working days. However, you should always consider if there are any staff who have poor health at the time as they may not be covered by a new provider.
- Can I move my death in service scheme to another provider in the future?
Yes, you can move your scheme to another provider at any time by contacting either Protect My People or your current provider directly to cancel your existing policy. You can then source a new provider for future cover.
Cancelling mid-term would not incur any fees. However, you would receive termination accounts and costings for the employees based on the number of days they have been covered under the policy.
Alternatively, you can wait until your current policy is due for renewal.
When the renewal date for your policy is approaching, we will be in touch to provide you with an updated quote with your current provider. To move to another provider, you can request further comparison quotes, which we will provide within 10 working days.
- How much will it cost to compare death in service insurance quotes?
We help you compare death in service insurance quotes and arrange the policy with the insurance provider on your behalf, but you do not pay us a fee for doing this. We receive commission from the provider which is a percentage of the total annual premium depending on scheme size.
- How do I compare death in service insurance quotes?
Simply enter your information into our quote form and we’ll do the rest!