Understanding Death in Service Benefit
Death in service benefit is a form of workplace life cover that pays a lump sum to an employee’s beneficiaries if they die while employed by the company. It is often confused with life insurance, but the two are not the same. This type of cover is tied directly to employment, meaning it usually ends when someone leaves the business or retires. While common in the public sector, where local authorities and government bodies frequently include it in their standard employee packages, its presence in the private sector is more variable.
Is Death in Service Common in Private Companies?
Whether or not private companies offer death in service cover depends entirely on the employer. Unlike pensions or minimum wage obligations, there’s no legal requirement for private employers to provide it. Some larger firms, particularly those with corporate HR departments or strong benefits packages, include death in service as part of a broader employee wellbeing strategy. Smaller companies, however, may not offer it at all. In many cases, it’s a voluntary extra rather than a standard feature.
Why Some Private Employers Do Offer It
Employers who choose to include death in service often do so to help attract and retain talent. It can be seen as a way of showing they care for the families of their staff, particularly if the role comes with health or safety risks. Cover is usually expressed as a multiple of the employee’s salary—often two, three, or four times their annual income. This payout can help the bereaved cover immediate expenses, support dependents, or contribute to funeral costs at what is already a very difficult time.
How Death in Service Works in Practice
In the private sector, where it is offered, the benefit is typically provided via a group life insurance policy. Employers pay into the scheme, and the employee is covered while they remain on the payroll. Death does not need to happen in the workplace or during working hours for the benefit to apply—it generally covers any death that occurs while the employee is still actively employed. Most schemes ask employees to complete a nomination form indicating who should receive the payout.
Can Employees Ask for It?
Some employees are unaware that death in service is even an option, but it is worth asking about during the hiring process or annual reviews. While not every employer will be willing or able to offer it, those with flexible benefits platforms might include it as an add-on. Where it’s not available, individuals often consider taking out their own life insurance policy to ensure some level of cover exists.
Alternatives When It’s Not Provided
For those working in the private sector without death in service cover, private life insurance policies remain the main alternative. These policies are portable, meaning they continue even if someone changes jobs. However, they come with a personal cost and usually require health screening or questionnaires. While they might not be directly linked to your job, they can offer peace of mind that financial support will be there for your loved ones if needed.
Implications for Families and Dependants
In the unfortunate event that someone passes away without death in service cover, families may find themselves navigating loss without immediate financial help. This can delay funeral planning or place an unexpected strain on surviving partners or children. When a death in service payout is made, it can offer a level of support that gives families breathing space during the worst possible time. It’s not just about covering bills—it’s about offering dignity, stability, and a form of security when it’s most needed.
Final Thoughts on Private Sector Cover
Ultimately, whether you get death in service in the private sector depends entirely on where you work and what your employer offers. It’s a valuable benefit, but not one you should assume you have. Employees are encouraged to check their contracts or speak with HR to understand what’s in place. For employers, offering this benefit can strengthen staff loyalty and reflect well on company values. As with many aspects of private employment, the key lies in clear communication and forward planning.