Do I need life insurance if I have in service death payment through work?

[Willsnbills]

Just the title really, would you take out separate life insurance if you have an in service death benefit of 10 times salary guaranteed from your work place. Are both necessary?
YABU -necessary
YANBU-not necessary

I only took out life insurance when I left my employer to go SE as I always had good death in service benefits

I have both. X times salary for death in service, plus value of mortgage on a separate policy.

The issue is if you leave your employer - then depending on your age a new policy might end up quite expensive. Having one in place younger might make it cheaper in the long run

Personally I would because you could lose your job or find yourself unable to continue in that job at any time. The older you are, the more pre-existing conditions you may then have, the more expensive life insurance becomes and the more likely it is that things will be excluded.

10x salary? Then no, I probably wouldn't but isn't it always cheaper to take out the insurance earlier?

My death in service isn't so generous. Combined with my life insurance, it would probably be 10x my salary.

It depends what you want to do though. Mine pays off the mortgage a few times over at the moment because I wanted to future proof in case we ever upsize and get a bigger mortgage.

My husband has this but we just took out joint life insurance because he's still relatively young and isn't sure he wants to stay in this job forever but even if he did, there's no guarantee he couldn't lose his job.

It really hangs on whether you have dependents. What will happen to them if you die? A friend of my lost her husband when her DC were 4 & 2. She was so glad that his life insurance combined with death in service paid the mortgage and has also been enough for her to work on a very part time basis. If you're single and don't have any dependents, then it probably matters less.

Depends on your circumstances, and how much money you would want to leave to your partner or any dependants if you died.

Personally I have both, though my death in service is only twice my yearly salary, not 10 times like yours is. But that is because I lost a parent when I was quite young, and if (God forbid) I die while my child is young, then I want to leave enough money to still hopefully set them up with a good start life. University fees, house deposit, therapy costs, wedding costs, etc etc. Plus inflation.

The peace of mind of knowing that if I were to die suddenly like my parent did, then at least there is a good financial safety net, is worth the monthly outgoing on the life insurance for me. Lots of other people would say it's a waste.

I have life insurance to pay off the mortgage if I die. It is only £5 a month. That's because I took it out in my thirties with few pre existing conditions.
I wouldn't buy an expensive policy if I also had death in service benefits, assuming the mortgage would be covered. £5 a month seems manageable to be, to cover me if I move jobs.

Depends. I did, because I was the breadwinner and I thought it was unlikely that dh would ever work again, so that ds and he would need a lot of cash for the future if I wasn't around. But my DIS wasn't as good as yours.

I do because my death in service wouldn’t cover my mortgage if I died. It also means I’m covered regardless of my employment status (as long as I keep paying!) My industry is becoming increasingly cutthroat so long tenure with the same employer is not guaranteed

I would always have my own as well. Term assurance is very cheap if you take it out whilst young ( and generally healthy) and gets more and more expensive as you get older.

You may leave this employer and need to replace the cover and taking it out in 10 years time will be a lot more expensive. You may also forget to or develop some medical condition that precludes doing so.

The proceeds of DIS plans are paid out on a discretionary basis ( for tax reasons). This means that who gets the payout is actually at the discretion of the scheme trustees and your partner/spouse/child etc has no legal right to the proceeds. The trustees will almost always follow the expression of wishes form you complete but they are not obliged to. In some circumstances they may choose to exercise this discretion but more often or not I've seen payouts made to people that it's clear the deceased would no longer expect to be the beneficiary. Most often it's parents when the deceased now has a partner and children or increasingly common, a former spouse.

It is absolutely vital that you keep the expression of wishes form up to date after a change of circumstances.

If you have dependents and a mortgage, then it’s advisable to take out life insurance. I have no dependents but I do have a mortgage. Unfortunately, I couldn’t get life insurance even through a broker due to my health needs. My death in service will cover a chunk of the mortgage and hopefully any savings I may have will cover a bit more. Nothing else I can do.

Depends on circumstances.

If you're the lower earner while doing most of childcare, and you'd leave a partner that would have to juggle working and raising DC while grieving you it would probably be worth having separate life insurance.

However there's other circumstances where it wouldn't be necessary. But 10 x salary is incredibly generous. What sort of employer pays that much?

But if you have no dependents and you die, it doesn't matter. Your house can just be sold to pay off your mortgage.

I have both, I took out life insurance when young and healthy and see my work products as complementary, if you develop a health condition now and then decide to leave that job and don't get another employer based one it's going to cost you a lot to take out one yourself.

I had a generous death in service benefit from my employer. Fortunately I have other life insurance in place as I was made redundant a few years ago after 33 years service.

I have both, one will be left to husband and one to children.

Global pharmaceutical company

DD thought she was fine with her 3x salary death benefit until I pointed out that it wouldn’t even pay off the mortgage.
She’s now got £350k life insurance as well - written in trust, which is of utmost importance as it can’t then be taxed as it’s outside a person’s estate.
Well until they decide to include it like they’ve just done with pensions 🙄

Let me point out that IHT will be due on death benefits where it pushes the estate above IHT levels.

i have both. what happens if you lose your job in a few years esp if you are older and have developed some conditions. Life insurance can become very £££ or even impossible then.

@BorgQueen aren't their rules though around passing to spouses and children under a certain age? If we are talking about people still with mortgages and/or children the most common reason for requiring life insurance id have thought exemptions would apply?

Yes. You could get a long term illness that means you can't continue with your job.

I have both. One will pay the mortgage, the other will make my partner and children’s lives easier.

Its also harder and more expensive to get life cover as you age, so if I end up with an employer who doesn’t offer it, or a lower level, then I still have cover myself.

on top of that I have critical illness cover that will pay a smaller lump sum if I get diagnosed with something like cancer. This will pay for extra treatment or treat us to a once in a lifetime holiday.

I always had death in service which would cover the mortgage with different employers, but the current one didn't offer it so I took out life insurance.