Death In Service Benefit


What is it?

Employers provide this is a type of life assurance to their staff. In the event of an employee’s death, the policy pays a lump sum. Unlike worker’s compensation benefits the employee does not have to die at work.

How Does It Work?

Insurance is provided for an agreed amount (say US$100,000 each) or alternatively, a multiple of salary such as 3 times annual basic salary.

What Are The Advantages?

This type of insurance is usually cheaper than individual cover. Often there is a figure known as the ‘free cover limit.’ Employees receiving a benefit below this value do not require medical or financial underwriting. Employees suffering from poor health can find this particularly useful, especially if they cannot obtain insurance privately.

Who Receives The Money?

When an employee dies, the insurance company pays the Trustees of the death in service benefit programme. The Trustees then pay the person nominated by the employee to benefit. Often this is the employee’s family but it does not have to be.

What Should I Do Next?

Please contact us to discuss death in service schemes.

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