Death in Service | Work Life Insurance Through Employer

Well done you.

You’ve worked hard, you’re now a valuable employee so it’s only right your employer offers you a benefits package.

You’d be crazy not to take it because of it’s advantages:

Advantages of life insurance through work

1 Automatic qualification

You won’t face medical questions so even if you have serious health issues, you will qualify.

2. Low cost

Work schemes are heavily subsidised or sometimes free (in lieu of salary)

But should you also consider personal life insurance?

I think you should and here are my reasons why:

4 reasons to consider personal life insurance (even if you have cover through your employer)

1. Do you have enough cover through work?

Group/employer death in service benefits are set at up to 4 times income.

While this sounds like a lot of money, it’s only enough to replace 4 years of your income.

Let’s look at a practical example.

You’re 35 and the main breadwinner earning €80,000 per year.

You have death in service of 3 times income.

You die suddenly at 40 with potential earnings until retirement of €80,000 x 28 (years to retirement) = €2,240,000

Your family receives a payout of €240,000

How do they replace the other €2,000,000 in lost earnings?

2. What happens if you change jobs?

Can you honestly say you’re in your current job for the rest of your life?

Whether the change results from redundancy, moving from full-time to part-time or leaving the job, you can’t keep your policy when you leave your job.

You’ll have to apply for personal cover.

You’ll be older.

You may have had a health issue.

Your premiums may be outrageous.

3. Your cover ends at retirement

With a personally held policy, you can extend your cover past your retirment age when you are most at risk.

With employer’s life insurance, your policy will end at retirement.

You’ll have to apply for personal cover.

You’ll be older.

You may have had a health issue.

Your premiums may be outrageous.

4. Your employer may withdraw the cover

And that can be without your consent, since the contract is between your employer and the insurer.

You’ll have to apply for personal cover.

You’ll be older.

You may have had a health issue…

Your premiums may be outrageous.

Advantages of personally held life insurance

You can tailor it to your individual needs.

You can add critical illness cover

You can extend it at any time without answering medical questions.

You can get cashback

You can buy life insurance that lasts for the whole of your life

You can use it as security for a mortgage (though I don’t recommend you do)

It’s for these reasons you should get an individual life insurance policy that you personally own, in addition to any group life insurance you have.

Treat employer cover as bonus or windfall cover.

It’s great to have but I wouldn’t rely on it.

Over to you…

If you have life insurance through work but are worried it’s not sufficient, please get in touch using the quick outline form below…

…or call me on 05793 20836.

I look forward to hearing from you.

Nick McGowan
lion.ie | making life insurance easier.