Trustpilot
Show More

Ask an Expert

Do I need life insurance if I already have death in service benefit?

There are multiple ways to ensure that if you die, those close to you will be taken care of financially. While this will often come in a form of life insurance, sometimes companies will offer a death in service benefit.

This means that should you pass while in employment, your beneficiary will receive a tax-free, lump sum of cash. Exactly how much this is will depend, but it’s generally between two and four times your salary.

So, if your employer provides this type of perk, is it still worth taking out life insurance?

Even if you have death in service benefit, it’s worth considering whether you need life insurance as well. Firstly, there’s nothing legally stopping you from having both, and doing so can offer an extra level of support. 

It’s also important to remember that the two are slightly different. The most important distinction is that your death in service only runs while you are employed by that company. So, if you feel you need cover and aren’t sure how long you're going to work there, a secondary life insurance policy might be a good idea.

You will also pay more for life insurance the longer you wait to take it out, potentially leaving you in a sticky situation if you opt for a policy later down the line.

You will also want to consider the level of protection that you are offered. As death in service is a multiplication of your salary, this could fall short of what you require. With life insurance, you can set exactly how much you need as a payout.

Essentially, it all boils down to your personal circumstances. While death in service is undeniably a fantastic perk, it has its limitations and is impacted by your changing circumstances. So, if you know you need cover whatever happens, then for peace of mind you should seriously consider taking out life insurance on top of your death in service benefits.

Related guides

How Much Life Insurance Cover Do I Need?

Life insurance is one of the most important financial decisions you can make, but it’s also one of the most confusing. A common question many people ask is: how much life insurance do I actually need?The right amount of cover should ensure your family can maintain their standard of living, pay off any outstanding debts, and avoid financial stress if you were no longer around. This might include covering a mortgage, replacing lost income, and meeting everyday living costs.In this guide, we’ll walk through a simple, step-by-step way to calculate how much life insurance you need, starting with a quick rule of thumb and then refining it based on your personal circumstances.

Life Insurance for Mums & Single Mothers

Being a mum is one of the most rewarding yet financially demanding roles. Whether you are a working mum, stay at home mum, or a single mum, securing financial protection for your children is crucial. Life insurance for mums provides peace of mind, ensuring that your family is taken care of if the worst happens.Many families rely on a single income or a combination of salaries to cover daily expenses, mortgage payments, and childcare costs. If something were to happen to a mum, the financial burden on the remaining parent or guardian could be overwhelming. This is why securing the right life insurance policy is vital to protecting the financial future of your loved ones.

Do You Pay Inheritance Tax on Life Insurance?

Life insurance is a vital safety net for families across the UK. With a generous life insurance payout, your loved ones can access the financial support they need after your death, helping them cover funeral expenses, mortgage repayments, bills and utilities, education costs and other general living expenses.However, many people worry about the taxman taking a huge chunk of their life savings, which can mean that their families don’t receive as much as anticipated. In this article, you’ll learn about paying tax on your life insurance, inheritance tax rules and regulations, and how to legally pay less tax on your estate after your death.