42 with a deathinservice benefit do not know how much would be

42 with a deathinservice benefit do not know how much would be

first_imgMore than two-fifths (42%) of employee respondents who have taken up a death-in-service benefit do not know how much would be paid out to their loved ones in the event of them passing away, according to research by Direct Line Life Insurance.Its survey, which canvassed the opinions of 2,004 individuals and 100 senior HR professionals whose organisations offer a death-in-service benefit, also found that 17% of employee respondents do not know what this benefit is, and 11% do not know if they would be covered by their employer.The research also found:89% of employer respondents offer employees a death-in-service benefit, with 5% of employers paying less than a years’ wages, 18% paying three to four times an employee’s salary and 5% paying more than five times an employee’s annual salary as standard.68% of employer respondents who offer this benefit increase the cover for employees in senior management positions.43% of employer respondents set the qualifying period for their death-in-service benefit as the completion of a probation period, compared to 40% who make it available from an employee’s first day and 18% who do not pay out until an employee has been at the organisation for at least one year.34% of employee respondents think they would be automatically entitled to receive a death-in-service benefit within their probation period.43% of employee respondents believe their death-in-service benefit will only pay out if they were to die in a workplace-related incident.14% of employer respondents would not release funds for up to three months or more, and 32% would not automatically pay out a death-in-service benefit to an employee’s chosen nominee, instead paying into a discretionary trust.Jane Morgan (pictured), business manager at Direct Line Life Insurance, said: “There is a great deal of confusion and misunderstanding regarding death-in-service. While it would be an invaluable employee benefit for many families if the worst were to happen, the amount paid out is unlikely to cover their outstanding mortgage balance. This could leave families in a financially vulnerable position, especially having lost an income, adding extra pressure at an already emotional and difficult time.”last_img

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