Death in Service Insurance - Death in Service Insurance is a form of Life Insurance that usually attached to a company pension scheme or is purchased by an employer for an employee as a benefit of employment. It is not usually purchased by individuals for themselves.

Although covers due vary from insurer to insurer a typical sum insured would be 3 to 4 times the annual salary, if the insured individual died whilst employed by the company effecting the insurance cover. ( Death in Service). The insurance payout is paid to the surviving dependants is free of taxation.

The amount paid out for a death in service claim is paid as a lump sum and is usually paid to the spouse of the insured.

Typically, the spouse of a deceased insured who was earning £30,000 per annum would be paid a tax free lump sum of £90,000.

If you are an individual and you are worried about Death in Service, you should speak to your employer to see id they already have a plan in operation that you may be eligible to join.