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Death in Service benefit - pension advice pls!!!

(6 Posts)
MissisBoot Thu 11-Jun-09 12:32:02

I'm a complete ludite when it comes to pension choices.

I've just started a new job and get a company pension of which I contribute a certain percentage and my employer matchs this.

Now - when I join it it gives me the choice of death in service - do I need this? my dh has his own pension which would give him more than enough to live on. I have other life insurance which would pay off the mortgage if I died.

So what does death in service mean? and what are the benefits of it? and is it worth paying an extra premium for it?

Thank you!!!

trixymalixy Thu 11-Jun-09 12:45:56

Death in service is just like life insurance usually it's expressed as a multiple of salary.

Usually your employer would pay for this for you as a benefit. I guess if they are asking you to pay for it, then you need to compare it to a comparable amount of life insurance elsewhere, I would imagine it would be better value than your own life insurance though.

Also you need to decide whether you feel you need the extra cover.

MissisBoot Thu 11-Jun-09 12:49:18

Thank you!

So, does my dh not need the extra life insurance premium that we pay for him?

We have a basic reducing term insurance policy which would pay off the mortgage if either of us die.

trixymalixy Thu 11-Jun-09 13:40:13

The death in service will only cover you so your DH will need his own life insurance whether through the policy you have or through his work.

FWIW DH and I have enough life insurance to cover the mortgage privately and then we both have death in service cover through work as well, so the mortgage would be paid off and the survivor would have some cash to live off as well.

DH is provided with a basic 2 times salary death in service for free and then can pay extra for extra multiples of salary, so check that's not the case with your work.

then it's up to you how much cover you want and how expensive it is through each method. As a minimum you need to cover your mortgage and bear in mind that if you change jobs the cover you get through your work will stop.

MissisBoot Thu 11-Jun-09 16:21:46

Excellent - thank you - DH has his own death in service on his pension so we'll have a look at whether this is better value than the additional life assurance.

BigGitDad Thu 11-Jun-09 22:44:26

I would be wary of stopping existing life cover just because you have DIS cover at work. What if he changes jobs and then you need cover then. It will be more expensive as you will be older. Or if your dh is off long term sick and has to leave work? How would you get cover then. If you have cover in place already you will still have the protection.
For me DIS life cover is a bonus and not to be relied upon.

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