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Death In Service

Death In Service

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About Death In Service

What is it that makes your business great? Is it the products that you have worked meticulously to develop and bring to market? Is it the way you have spared no expense in sourcing the highest quality of components and manufacturing to make them? Is it the services you provide that consistently delight your customers? Is it the clever marketing campaigns that control the narrative around your brand and create positive buzz amongst your target audience? Is it your strategic leadership and the input of your partners that have continued to shape your business and chart the course of its success?

While the above are all undoubtedly important factors in the ongoing success of your business, it would be churlish to overlook the contributions that your employees at all levels make to the ongoing success and prosperity of your operation. While you make sure that they are well remunerated for their efforts and have access to the ongoing training and professional development that they need to excel, it also behoves you to ensure that their families and loved ones are protected if the worst should happen.

This is why many entrepreneurs offer their employees Death In Service benefit so that they have the peace of mind that comes from knowing the people who mean the most of them will be financially protected when they are no longer there to provide for the family.

What is Death In Service?

Some providers will also allow employees’ partners or spouses to take out their own separate Death In Service policy.

Death In Service is a form of life insurance policy that helps businesses to support the spouses, partners or families of their employees if they (as the name suggests) die while in the service of your company. Please note that this does not necessarily mean that they die within the course of their daily duties but while they are employed by your company.

In all cases a lump sum benefit is paid to surviving partners or family members and the amount paid out depends on the employee’s salary as well as the kind of cover selected by the employer. There are no stipulations on how the lump sum is spent. Families may choose to put it towards funeral expenses, their mortgage or however they may see fit.

In addition to a lump sum payment, policies may also include bereavement counselling for the surviving spouses or relatives of deceased employees. Some policies may also have an optional dependent pension. This allows businesses to provide a pension for employees’ spouses or even their children.

Some providers will also allow employees’ partners or spouses to take out their own separate Death In Service policy. This will protect your employees if their spouses employers do not offer Death In Service benefit.

Why does my business need Death In Service?

Your company could have various workers essential to profits. A key person is not always the top sales person or “bread winner”.

Death In Service is not a statutory requirement for businesses. Nonetheless there are many good reasons why businesses of all shapes and sizes should seriously consider it for the good of individual employees and the business as a whole.

Offering Death In Service benefit makes businesses highly desirable to prospective employees and this in turn can allow your organisation to attract the kind of top-drawer candidates to fill a range of positions to facilitate operational excellence and see the business go from strength to strength. It can give your operation a competitive edge in your market. If your competitors do not offer this as a benefit, you will be more likely to recruit the most outstanding talent at their expense.

It can also be a superb morale booster. It shows your employees that you genuinely care about the wellbeing of their loved ones and this can go a long way towards ensuring their loyalty now and in the future.

Under current UK tax laws, your Death In Service premiums are also (under most circumstances) an allowable business expense allowing your to protect your employees without restricting your cash flow.

How does Death In Service work

The cost of Key Man Insurance is based on each individual life assured. It’s calculated much like normal.

Death In Service cover is applied to the entire workforce meaning that employees don’t have to answer any embarrassing medical questions and they have the peace of mind that comes with knowing that they are covered regardless of cause of death. Employees are covered regardless of their age or the position they hold in the company.

The employer pays the cost of the premium rather than the employee and the insurance provider bases the cost of the premium on the risk factors of the workforce as a whole rather than individual members. They may consider a number of key factors including the ratio of women to men, the average age of the members’ ages and the kinds of jobs they perform for you. They will likely also factor in the nature of the company itself, since different industries and sectors carry different inherent risk factors.

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Meet Our Team

Our dedicated team are here to offer you expert FCA qualified advice along with 1st class support to make sure the process is fast and simple

meet our team

Jody Pearmain
Jody Pearmain

Managing Director & Founder (My Key Finance Ltd)

Lori Norton
Lori Norton

Administration Manager at MyKeyManInsurance.com (My Key Finance Ltd)

Tyler Pearmain
Tyler Pearmain

Senior Keyman Insurance Adviser at MyKeyManInsurance.com (My Key Finance Ltd)

Keri Gardiner
Keri Gardiner

Customer Service & Website Admin at MyKeyManInsurance.com (My Key Finance Ltd)

Death In Service FAQ

Still have questions about Death In Service? Hopefully our FAQ will help:

Key Person FAQ

That depends on the policy. Payouts usually range from 1-4 times the covered employee’s annual salary.

If you have any further questions we’d be delighted to discuss them with you and help you to find the right cover for your business. Call us today on 020 7112 8844.

Cover normally ceases when employees reach the state pension age. This is currently 64 years of age for women and 65 for men. If you have employees above this age they may not be eligible.

Yes, they can. In fact, you may want to encourage your employees to take out their own Life Insurance to supplement your Death In Service benefit. Death In Service differs from individual life insurance in a few key ways. For example

  • Cover ends when the employee stops working for you.
  • Cover cannot be changed as it is linked to the employees salary.
  • Employers rather than employees are the policy holders.
  • Employers rather than employees are responsible for all administration and liaising with the insurer.

Thus, while Death In Service is an extremely attractive benefits, individual employees may wish to use their own Life Insurance policy as well depending on their needs and circumstances.

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