Death in Service Benefit
for Employers & Directors
Protect your people. Strengthen your business.
At Bright Money, we help UK employers and accountants understand how Death in Service Benefit can support staff, protect directors, and create a more caring workplace. It’s simple, tax-efficient, and a smart way to show employees that you value them.
Whether you run a small business or manage payroll for multiple clients, we’ll make the setup easy — and ensure your cover works in the most efficient way for your company.
⚖️ Why Employers and Accountants Recommend It
Tax-efficient protection
Premiums are normally treated as a business expense, so they’re eligible for corporation tax relief. No National Insurance costs or P11D implications for staff.
Attract and retain talent
Offering a death in service benefit signals you care about employee wellbeing — a strong selling point in recruitment and retention.
Easy to administer
We’ll handle everything: setup, trust creation, and communication with staff. Once in place, it runs smoothly in the background.
Great for small companies and directors
If you’re a limited company director, you can get similar protection through a Relevant Life Policy — giving you the same cover personally, in a tax-efficient structure.
🧮 Death in Service Benefit for Accountants
Accountants love this benefit because it’s clean, compliant, and adds value for their clients.
We’ll help you:
Advise clients correctly on corporation tax treatment
Understand how to structure group schemes or single-director cover
Compare Death in Service vs Relevant Life options
Get access to quotes from leading UK insurers with no extra admin
We work with many accountancy firms who trust Bright Money to manage benefits on their clients’ behalf.
👨👩👧👦 Options for SMEs and Limited Companies
Group Death in Service Scheme
Ideal for employers with multiple staff. Cover everyone on the same simple plan, with one premium and one renewal date.
Relevant Life Policy (for Directors or Key Employees)
For one-person businesses or company directors — personal life cover paid for by the company, usually qualifying for corporation tax relief.
Both options give peace of mind to your team and financial efficiency to your business.
💡 Example: How it Works
Emma runs a small design agency with 10 staff. She sets up a group death in service benefit providing 4x annual salary cover.
- It costs the business under £10 per employee per month.
- Premiums are tax-deductible.
- If something happens, the family receives a tax-free lump sum.
Emma gets staff loyalty, better recruitment appeal, and peace of mind knowing her team is protected.
FAQ
about
Death in
Service
Benefit
Is Death in Service the same as life insurance?
No. Life insurance is usually arranged by an individual, while Death in Service cover is provided by an employer as part of an employee benefits package. Both typically pay a lump sum on death, but they differ in how they are set up, who pays for them, and how they are treated for tax purposes.
Can directors get Death in Service cover?
Yes. Directors can usually obtain similar protection through a Relevant Life Policy, which is designed for company directors and higher earners. It provides life cover through the business rather than as a personal policy.
Is Death in Service taxable?
In most cases, no. Death in Service benefits are usually paid through a discretionary trust, meaning the payout is not subject to income tax or inheritance tax. Tax treatment can depend on how the policy is structured.
What happens to Death in Service cover if an employee leaves?
Death in Service cover normally ends when employment ends. Some employees may have the option to convert their cover into a personal life insurance policy, subject to the insurer’s terms.
Do I need a trust for Death in Service benefits?
Yes. Death in Service policies are typically written into a trust. The trust allows benefits to be paid quickly to beneficiaries and helps ensure the payout is not included in the deceased’s estate for inheritance tax purposes.
How much does Death in Service usually pay out?
Death in Service benefits are often calculated as a multiple of the employee’s salary, commonly between two and four times annual earnings. The exact level of cover depends on the employer’s scheme or policy terms.
Is Death in Service compulsory for employers?
No. There is no legal requirement for employers to provide Death in Service cover. However, many employers choose to offer it as part of a wider employee benefits package.
Can Death in Service cover be offered to a single employee?
Yes. Even if a business has only one employee or director, it may still be possible to arrange equivalent cover through a Relevant Life Policy rather than a group scheme.
Does Death in Service cover include illness or only death?
Death in Service cover only pays out on death while the employee is in service. It does not usually provide critical illness or income protection benefits unless these are arranged separately.
Is Death in Service different from a Relevant Life Policy?
Yes. Death in Service is usually a group benefit provided to employees, whereas a Relevant Life Policy is an individual policy set up by a company for a specific employee or director. Both aim to provide tax-efficient life cover through an employer.
Ready to Protect Your Team?
Bright Money makes setting up Death in Service Benefit simple, compliant, and cost-effective.
You’ll get expert advice, no jargon, and support every step of the way.
Call us: 01844 390910
Email us: info@bmimoney.co.uk
Or use the form below and we'll be in touch.
