Some employers provide death in service benefits which will usually pay out a tax-free lump sum if their employee dies while still working for them. In many cases, it is tied to being a member of the company pension and the amount paid will depend on the scheme.
However, death in service is not necessarily a replacement for life insurance. It may not provide the amount of cover needed to financially protect your family in the event of your death and it also can't be assigned to a lender to repay a mortgage.
Something else to consider is that death in service benefits stop if you change employer, so to maintain any life insurance cover, you'd then need to set up a separate policy. The cost of Life Insurance will be more expensive when you get older and future medical conditions can also increase further increase any monthly premiums you pay.
Lastly, with Life Insurance you have more options to better fit your life cover needs. For example, you can decide on the type of cover, how long you’re covered for, and who the money goes to if you die during the chosen term of the policy. For example, you might consider taking out decreasing life insurance cover to repay a capital and interest mortgage. This is because the amount of cover aims to reduce in line with this type of mortgage. For more information please visit our types of Life Insurance cover explained page.
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