You might have come across the term "Death in Service" benefit as part of your employment benefits package or after the death of a loved one. Here we’ll outline some basic information about group Death in Service benefits in Ireland, including what they typically include and answer some frequently asked questions.

A Death in Service benefit is a type of life assurance that provides money for your loved ones after you die. Many Irish employers provide a Death in Service benefit for their staff as part of their benefits package. This type of life insurance is provided as part of a group plan, which is often connected to a retirement plan. However, it can also be offered as a separate plan, without any connection to a pension scheme.

It serves a similar purpose to a personal life assurance plan but there are some slight differences. Many people choose to have a combination of Death in Service benefits and personal life insurance plans, along with mortgage protection, to meet their overall life insurance needs. 

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What is a Death in Service benefit?  

Some employers provide Death in Service benefits for their employees as part of their benefits package. You might even already have this benefit as part of your overall package without realising it. Usually, these benefits are connected to a pension plan offered by your employer, but it's not a must-have requirement. The money paid out as a benefit is described in the rules of the plan, which is managed by a group of people called the Trustees.

Death in Service benefits usually provide a one-time payment (a “lump-sum”) after you die. However, some plans provide a combination of a lump-sum payment and a pension for your loved ones. Check with your employer to see what benefits are covered by your plan. The benefits are often tied to your salary, which helps comply with the maximum benefit limits set by the tax authority (Revenue).

For example, a typical benefit would be:

Sinead’s salary is €45,000 per year and she has a Death in Service benefit of four times her salary. If she dies whilst still in service, €180,000 will be paid to her estate.

The benefits will be paid out if you pass away while you're still working for your employer. Most plans have a certain age limit beyond which the coverage stops. Also, it doesn't matter if the cause of death was related to your job or not.

Who receives Death in Service benefits? 

Having life insurance, like Death in Service benefits, is a way to make sure your family is taken care of if you pass away. After your death, the benefits are paid out to your estate. Usually, this means the money will go to your spouse or kids. This can help them with expenses like funeral costs or bills.

There’s no “one case fits all” approach for who receives it, as it can vary based on your personal circumstances including whether you have a will or other dependents to take into account. This is why it's important to know the details of your plan to know who gets the money and how it will be given to them. It's also a good idea to check your insurance regularly to make sure it still meets your needs. 

What’s the difference between Death in Service benefits and personal life insurance plans?  

The purpose of both Death in Service benefits and personal life insurance is that they can help your loved ones after you die. A Death in Service benefit can only be provided through your employer and is linked to your service with that employer, but you can take out a personal life insurance plan yourself.

Personal life insurance plans are individually underwritten. This means that when you apply for personal life insurance, the life assurance company will look at things like your health and lifestyle in setting the terms for your cover. Typically, some minimum level of cover is provided under a Death in Service plan without any underwriting, so you can avail of some minimum level of cover without having to go through a medical exam or answer health questions.

Differences between death in service benefits and life insurance include: 

Death in service benefit:	Life insurance:
Provided by your employer as part of a group plan	Provided by your own personal plan with a regulated life assurance company, like  Irish Life Assurance
The employer pays for the cover	You pay for the cover yourself
Typically, some level of benefit is provided without underwriting	Each plan is individually underwritten
The benefit ceases if you leave that job	You choose how long the plan lasts, and it is not tied to your employment
The benefits are set out in the plan rules and are often a multiple of your salary	You choose the amount of cover to suit your needs
An individual cannot typically change the terms or level of cover	You have more control and flexibility  to set and change your level of cover

What level of benefits are covered under Death in Service in Ireland? 

When you die, the money from your Death in Service benefits can be given to your loved ones in two ways: all at once as a lump sum or as a monthly payment, like a pension. The amount and way that it is paid out is set out in the plan rules and overseen by a group of people called the Trustees. The amount of money that your loved ones will receive, and how it will be paid, is usually based on your salary. For example, a typical lump sum benefit is four times the amount of your salary.

There are Revenue rules that apply to the benefits payable under Death in Service plans. The lump sum paid out can't be any more than four times the employee's salary, or €6,350 (whichever is greater).  

Is Death in Service benefit taxable? 

Depending on your circumstances, Revenue allows a maximum of four times your salary to be paid out tax-free as a lump sum after your death. Depending on who receives the lump sum after your death they may have an inheritance tax liability, so it’s best they seek independent tax advice.

Main takeaways on Death in Service and life insurance 

It's common for many people to have life insurance coverage as part of their job benefits. To find out if you have a Death in Service benefit and what it covers, you should check with your employer. This information will let you know what kind of financial protection your loved ones will have in case you die.

Getting the right life insurance for you and your family depends on your specific needs and situation. There are many different insurance plans available, each with different levels of cover. A Death in Service benefit from your employer can be an important part of your overall insurance plan, but it's important to also consider other options and make sure you have the right amount of cover for your loved ones.

You may also want to consider getting a separate personal life insurance plan to make sure your family is taken care of in case of your death. This type of plan can give you more control over the benefits you provide for your loved ones.  Additionally, some life insurance plans offer extra benefits.

For example, "specified illness cover" is an optional benefit available on a selection of life insurance plans available from Irish Life Assurance. Specified illness cover pays a lump sum if you're diagnosed with an illness covered by the plan. So, if you're not able to work because of your illness, or need to adjust your home with modifications like stair lifts and shower supports, that money is there to help.   

You can use Digital Advice to assess your financial needs and get a personalised financial plan now or speak to a financial advisor to discuss your life insurance needs. As we are tied to Irish Life Assurance, any life insurance plans we recommend will be provided by Irish Life Assurance.

Figuring out your life insurance needs can seem daunting, and it’s not something you have to figure out alone. Whether you're looking for protection for your family or are simply curious about your options, our expert advisors are on hand to help. Get straightforward financial advice on life insurance by booking a phone or video call with one of our advisors for a time that suits you.