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Don't rely on Death in Service

Writer's picture: Gregory DeerGregory Deer

Updated: Oct 31, 2024

Death in service (DIS) is a valuable employee benefit.


If you’re employed, there’s a good chance you have DIS and it usually pays out a multiple of your salary on your death. Typically around three to four times, but varies on your employer.


The numbers sound impressive. X times your salary is a lot of money!


However, relying only on death in service benefit to provide financial security for your family is a mistake.


DIS is good


Death in service is a great employee benefit. Your employer usually covers the insurance cost and there’s no need for medical underwriting.


Your beneficiaries will receive any benefit tax free on death and it’s a useful tool to partially replace your lost earnings if you die.


So far, so good.


DIS is bad


Death in service benefit will only pay out while you’re in your current employed role, on your current salary. Even if you expect to stay in your job for the long-term, things change.


Just yesterday I spoke to my brother who absolutely loves his job. Well, he did… until the company implemented new management and a lot of changes happened.


I’ve seen clients move onto new opportunities faster than they thought, and I’ve seen clients made redundant overnight. Things change when you don’t expect them to.


Additionally, death in service is not always enough to provide your family with financial security.


Sure, X times salary sounds like a lot of money, but does it adequately replace all your lost future earnings, allow your surviving partner to live well, save for their retirement and help your children onto the housing ladder? Probably not.


What you can do


You should ensure you have personal financial protection policies in place to cover the basics.


This gives you the peace of mind your family have financial security, whatever happens in your career.


Don’t wait until you have a health scare, or your death in service changes, sort it now.

I’ve worked with 4 families in the past month who have been decisive, and financially protected their family.


If you’re ready to be next, hit reply or book a call with me below.


Life Assurance plans typically have no cash in value at any time and cover will cease at the end of term. If premiums stop, then cover will lapse.

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