What is death in service?

It is life cover provided by your employer, usually set as a multiple of your basic salary, paid to your family if you die while working for them. It ends on the day your employment ends.

What to find out about yours

The multiple, and what it is a multiple of
Usually basic salary. Whether bonus, commission or overtime count varies between schemes, and the difference can be substantial for anyone paid partly on results.
Who would receive it
There is a nomination form, separate from any pension expression of wish. Trustees normally have discretion and use the form as a guide.
Whether it is registered or excepted
A registered scheme payout is tested against the member's lump sum and death benefit allowance. An excepted policy sits outside the pension regime and is not.
What happens when you leave
It stops. It has no cash value and there is no right to continue it individually.

How much is actually paid out

Group life insurers paid £1.8bn in claims in 2025, and the average claim was £143,436. That is the figure worth holding against your own mortgage and the years your household would still need supporting.

Whether it is enough is a different question from whether it exists. Cover set at a multiple of salary takes no account of what you owe or who depends on you.

It ends the day your employment does. People who leave, retire or are made redundant are uninsured from that morning.

Related questions

Is death in service the same as life insurance?

It is life insurance, arranged and paid for by your employer. The practical differences are that you do not choose the amount, you do not own it, and it ends with the job.

Does it pay out if I die outside work?

Yes. It is not accident cover and it is not limited to death at work. The condition is that you were employed at the time.

Do I need to do anything to keep it?

Only to keep the nomination form current. It is the part that decides who gets the money and it is the part most often out of date.

Is it taxed?

Usually not, though it can be. A registered scheme lump sum is tested against the member's remaining lump sum and death benefit allowance, has to be paid within two years of the scheme learning of the death, and is taxable if the member died at 75 or over.

Where this fits

Ask your employer what the multiple is and who you have nominated. We will tell you what it would leave your household short by.

Death in service and relevant life coverGet a complimentary health check

The advisers for this subject

Sunny Bharj

Sunny Bharj

Independent Financial Adviser

Tony Springer

Tony Springer

Independent Financial Adviser

Advising through Equity & General Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority. Check the firm on the FCA register under number 474163.

Talk to an adviser

A first conversation of about twenty minutes, at no cost to you. Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write.