Death in service benefits?

Lu_Lu

I was told by someone the other day that death in service benefits rarely pay out as there is a lot of small print (they weren't specific about why.) Is this true? My husband and I have very good DIS benefits with our jobs but if they're worthless I need to up the life insurance!

jem16

Lu_Lu wrote: »

I was told by someone the other day that death in service benefits rarely pay out as there is a lot of small print (they weren't specific about why.) Is this true? My husband and I have very good DIS benefits with our jobs but if they're worthless I need to up the life insurance!

No it's not true.

I had the misfortune to use my husband's death in service benefits almost 13 years ago. They paid out a lump sum, a pension for me and a pension for my two sons with no issue at all. All sorted very quickly.

InsideInsurance

All insurance has "small print" aka terms and conditions but DIS doesnt typically have anything concerning in there. The only issues I've heard of on DIS is issues of who the beneficiary should be in the case of very old nominations/ lost nominations/ lack of a nomination

Keep_pedalling

The someone you have been talking to is an idiot, or they are trying to sell you insurgence you don't need.

Lu_Lu

Keep_pedalling wrote: »

they are trying to sell you insurgence you don't need.

I think this might have hit the nail on the head! We have always had life insurance to cover £155K and thought our DIS benefits would then be a nice bonus, extra £90K / £160K respectively, but he said that they rarely pay out and so we need extra cover for the new mortgage.

Granted, we will have a shortfall of £143K so just need extra life insurance for this, with critical illness on top.

Cheers!

Lu_Lu

jem16 wrote: »

No it's not true.

I had the misfortune to use my husband's death in service benefits almost 13 years ago. They paid out a lump sum, a pension for me and a pension for my two sons with no issue at all. All sorted very quickly.

so sorry to hear this, thanks for your reply.

kingstreet

DIS cover is designed to replace the income of the deceased for a short time and to allow the surviving spouse to perhaps have a bit of time off to look after the kids who have lost a parent.

That isn't really possible if DIS is being used for debt repayment.

That's why you will normally be advised to keep needs separate. In addition, the cost of decreasing term assurance to repay a mortgage is not that great for someone youngish, healthy and non-smoking.

As has been suggested previously, make sure any nomination is kept up to date so the Trustees are in no doubt to whom the benefit should be paid.

dunstonh

I was told by someone the other day that death in service benefits rarely pay out as there is a lot of small print (they weren't specific about why.) Is this true?

No. not true.

There are some death in service set ups with employers that only pay out if there is a spouse/civil partner or children aged under 23. However, most will pay out as long as you are an employee.

As mentioned higher up, most people will find that death-in-service by itself is not enough. its primary purpose is to provide for short term loss of income or reduced pension benefits. You would not typically use it to cover a mortgage for example.

martinsurrey

dunstonh wrote: »

No. not true.

There are some death in service set ups with employers that only pay out if there is a spouse/civil partner or children aged under 23. However, most will pay out as long as you are an employee.

As mentioned higher up, most people will find that death-in-service by itself is not enough. its primary purpose is to provide for short term loss of income or reduced pension benefits. You would not typically use it to cover a mortgage for example.

I have to keep my DIS cover secret from my wife...

Its too generous, I'm worth a lot more dead than alive, if she found out I'd find myself skydiving every weekend...

InsideInsurance

martinsurrey wrote: »

if she found out I'd find myself skydiving every weekend...

Its when she starts to offer to pack your parachute for you that you've to be worried