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 have both. Death in service assumes you'll be working right up to the bitter end and you may not want to if you don't have to

I've got mortgage cover and life and critical illness cover separately from my DIS benefits, which are 4× salary. I went through a free broker and they took into account the fact that I had DIS benefits already when recommending a policy for me.

I have a separate life assurance policy as my work has changed a few times

I have both, I can't remember exactly what I get through work, it's either 3 or 4 times core salary but I have a good bonus scheme so it's not my full salary. I also have life insurance for the duration of my mortgage. The two combined mean that my partner and daughter shouldn't have financial worries. The two combined are also more than 10 x my core salary.
You need to work out what money is required to pay off debts and living costs. There are calculators to help you work out what cover is recommended. I'd do that and then work out if you need life insurance too. It might mean you need less than you would do in other circumstances.
I was only a year into my role when I got my mortgage didn't want all my forward planning tied to my job in case it didn't work out

Both DH and I have four times our salary as a death in service benefit, either of which would more than clear the mortgage for the surviving spouse so we have never taken out separate insurance. We would do if it was required in order to enable the other to clear the mortgage.

Any life insurance NOT written in trust wiill attract IHT if large enough to push the estate over the £325k (if single) / £500k ( if married and property worth £175k+).
Say you are not married/civil partnered and you have a house worth £250k not including any mortgage, your life insurance is £350k, your estate is well over the IHT limit so it will be paid on £275k, meaning a bill of £110k !
The same goes for Death benefits from 2027 if they are attached to a DB pension.
So many people don’t understand about the importance of having life policies written in trust, few have even heard of it.
Putting IHT on death benefits is obscene.

Death in service also only usually applies if you are actively working - if you are unlucky enough to be off sick long term when you die then your family may not even get it.
Always check the details.

Depends on the age of your kids and costs.

If you earn much less than your h who wouldn’t be able to pay the mortgage and high childcare costs for your very young children then I would get more (if it was affordable ) If 10x your salary is like a million pounds and a nanny/L for 10 years plus paying off the mortgage would leave lots of money left then it’s not so urgent.

You only need life insurance if you have dependents. That is what it is for. If no one is counting on your salary to make ends meet, you do not need life insurance.

I had both. Then I was made redundant and became self-employed. I now just have the insurance. Circumstances change.

10 x salary?! I don’t think I would bother then.

The answer is it depends.

basic maths. What do your dependents need? are you single? Married? Kids? Would your partner work, need to outsource childcare/housework to enable him to do so?

what are your debts? Mortgage, any loans/car/credit card bill?

simply put I’d have life insurance to pay off mortgage/debts, and then your dependents will have your death in service to live off until they are independent.

More complicated work from the age of your children and calculate your lost wages until they are 25. Add in debts etc, and work out how much capital and how much per year they’d need until independence, and get the life insurance to top up to the sum needed.

financial advisors are always worth the money.

If your kids are toddlers though that’s another 20 years of dependence. So I’d say you need more than 10 years, especially if there are mortgages to pay off etc.

if the kids are later teens you might only need 10 years to get them through uni and independent .

it also depends on partners, who would have the kids, and if any loss of your wage would cause financial hardship.

circumstances matter.

The OP didn’t say she had dc & most people get life insurance to cover the mortgage & terms that reduce as your mortgage does.

I have assumed the mortgage isn’t 10 times the OPs salary…

I'd say yes, just in case. You could leave your job, be made redundant, the company could shut down, they could get rid of this policy. It's not a guarantee. Also, assuming you worked until you were 60-68 and then left the job, what would you have in place? You'd be paying more for life insurance at that point.

Also, what about critical illness cover? If you became so unwell or disabled that you couldn't work, your DIS policy is useless.

No it won’t. Death in service payouts or Life insurance payouts are almost always IHT free (unless the person offering the policy has really, really screwed up!)

The payments are not treated as part of your estate.

I didn’t have life insurance. But I did have income protection insurance, which made up my salary to its full level when I was off sick for 18months

It's never necessary to have life insurance, as you no longer need it to get a mortgage. So it's up to each person. We don't have it because DH would get something from work and the mortgage isn't that big.

One type of cover may not be enough even if the amount is probably good (salary depending). Death isn't so costly, and it's about those left behind, what needs would they have, but you may also want to look at critical illness and a policy to cover your inability to work. You probably have enough for death, but I'd cover the other ones.You can also look to those that step down with your mortgage balance etc.

2DC and also separated, soon to be divorced. Thanks all, I’ll keep the life insurance.

Yes because (a) death in service benefit is usually discretionary and only lasts up to a certain age (often 60), when you are likely to work beyond that age (unless very fortunate!) and (b) you might change job/lose your job and the later you leave it to get life insurance, the more expensive it is. It may even prove impossible to get decent cover, for example if you get diagnosed with a heart problem/cancer/whatever before you try to incept a policy.

Will your work death in service give adequate cover? That is the answer your question.

If you get a serious illness you may well find that you lose your job because you are no longer capable of working. At that point , with a serious illness, life insurance may not be available. Life insurance is cheap when you are young and healthy so that is the time to buy it

Definitely need life insurance too. If you have a terminal illness and can no longer work, your employment will likely be ended and it will be too late to get life insurance.