Death-in-service cover: check what your family would have after a job change

Life cover provided through work can be a valuable part of a household protection plan. It should still be recorded separately from cover you hold personally, because eligibility and the amount can depend on the employment arrangement.

Before changing jobs, reducing hours or becoming self-employed, ask what cover ends, what replaces it and on which dates. A benefits package quoted as a multiple of salary needs translating into pounds before it can be compared with the family's needs.

Obtain the scheme's actual description

MoneyHelper's life insurance guide notes that employee packages can include death-in-service benefits linked to salary and that employer cover normally ends when you stop working for that employer.

Ask HR or the benefits administrator for the current scheme information. Confirm eligibility, the salary definition, the benefit multiple and any limits. A summary in an old job offer is not necessarily the current cover statement.

Check whether the benefit is a lump sum, a dependant pension or another arrangement. These produce different patterns of financial support. Keep them in separate rows rather than adding annual income and one-off cash as though they were the same amount.

Turn the salary multiple into a usable figure

Suppose an invented scheme provides a lump sum of four times a defined £40,000 salary. That produces £160,000. If the relevant pay definition excludes a bonus, the bonus should not be added simply because it appeared in last year's total earnings.

Now assume a new employer offers three times a defined £48,000 salary. That would be £144,000, which is £16,000 less cover despite the higher salary. This example does not describe either employer's real terms; it shows why the multiple and salary basis need to be considered together.

Ask for the figure in writing if the definition is unclear. Also check whether a future pay or hours change automatically changes the insured amount or requires an update.

Compare cover with needs, not only other benefits

A useful household calculation identifies debts to be addressed, short-term costs and the longer-term support needed by dependants. It then considers other resources that are genuinely available for those purposes.

For illustration, assume a household identifies a £350,000 lump-sum need before allowing for existing cover. A confirmed £160,000 workplace benefit leaves £190,000 to examine through other resources or protection arrangements.

That arithmetic is not a recommendation to buy £190,000 of insurance. The initial need may change after a proper assessment, and the timing, ownership and availability of other money matter. The example simply prevents the existence of workplace cover from ending the discussion prematurely.

Put leaving and joining dates on one timeline

Ask the current employer when cover ends and the new employer when it starts. Include any eligibility condition, waiting period or administrative requirement. Do not assume that two employment dates automatically provide uninterrupted insurance.

For a move into self-employment, there may be no replacement employer scheme at all. Build that change into the protection review before relying on business income to support the family.

If considering personal cover, check acceptance and the confirmed start date before cancelling existing personal insurance. A quotation is not the same as an active policy, and a new application can involve different underwriting terms.

Check absences and changes in working pattern

Ask how the scheme treats parental leave, unpaid leave, long-term sickness, secondments and reduced hours. The answer should come from the scheme terms rather than an assumption that all employees remain covered in every circumstance.

If the benefit depends on active membership of another employee arrangement, confirm what happens when that membership changes. A decision made for payroll or pension reasons can have consequences elsewhere in the benefits package.

Keep the written response with the household protection record. A short review after a significant employment change can be more reliable than trying to reconstruct the terms when a claim is needed.

Keep beneficiary information up to date

Find the scheme's nomination or expression-of-wish process and check the details after marriage, separation, a new child or another relevant family change. Ask how the nomination is used and who ultimately decides payment under the arrangement.

Do not assume a workplace form replaces a will or determines every other pension and insurance benefit. Each arrangement can have its own process. Record where the latest forms are held and when they were submitted.

For complicated family circumstances, legal and financial advice may need to work together. The practical aim is for the scheme to have current information and for the wider plan to reflect how benefits would actually be handled.

Review the household's cover as one record

Maintain a table of workplace and personal arrangements showing the insured person, benefit amount, expiry or eligibility conditions, provider and contact details. Note which benefits depend on continued employment and which do not.

Further guides cover income protection advice, planning for self-employment and financial advice for business owners. A job change is a useful moment to update the record, even when no new policy is ultimately needed.