Many employees take comfort in knowing their employer offers Death in Service (DIS) benefit — a lump-sum payment to their loved ones if they pass away while employed. It’s a great perk, but it’s important to understand that relying on it as your only protection comes with some serious drawbacks.
Let’s look at why.
What Is Death in Service?
Death in Service is a benefit provided by many employers. If you die while employed, your family receives a lump sum — usually a multiple of your salary (often 3x or 4x your annual earnings).
It’s a valuable part of your employee package, but it’s not the same as a personal life insurance policy.
It’s Not Guaranteed Forever
Your Death in Service benefit only lasts as long as you’re employed by that company.
If you change jobs, are made redundant, or move to an employer that doesn’t offer the same benefit, you lose your cover immediately.
And unfortunately, life events — like a new mortgage or starting a family — often happen around the same time as career changes. The last thing you want is a protection gap when your responsibilities are growing.
Your Employer Could Remove or Change It
Death in Service is an employee benefit, not a personal policy you own.
That means the company can change or withdraw it at any time — especially during restructures or cost-saving measures.
With personal life cover, you stay in control. You choose the amount, the term, and you keep it regardless of where you work.
Some Policies Have Restrictive Conditions
Not all DIS schemes are as straightforward as they sound. Some older or more limited policies have conditions such as:
- The death must occur on company premises
- The death must occur during working hours
- The employee must be actively employed at the time of death
- While these aren’t typical of modern schemes, it’s a reminder that you may not be covered in all circumstances.
It Might Not Be Enough
Even if your employer offers 4x your salary, that may not stretch very far.
For example, someone earning £40,000 would leave £160,000 — which might not be enough to clear a mortgage, support dependants, or provide lasting financial stability.
A personal life policy can be tailored to your family’s real needs, ensuring your loved ones are fully protected.
The Smarter Approach
Think of Death in Service as a bonus, not a plan.
It’s a nice safety net to have — but it shouldn’t replace personal life insurance that you own and control. A private policy moves with you, pays out on your terms, and ensures your family’s future doesn’t depend on your job.
Final Thoughts
Your employer’s Death in Service cover is a welcome benefit, but it’s not a substitute for proper protection.
If you’re unsure what cover you currently have — or how much your family would actually receive — it’s worth reviewing it alongside your personal life insurance options.
We can help you work out what’s already in place and where the gaps might be — so you can make sure your loved ones are fully protected, no matter what happens.
