Death in Service?

[wannabeek]

Hi there, can anyone give me advice on this situation?

I've recently had a mortgage lender try to give me the hard sell on life insurance to cover the value of my upcoming mortage should I pop my clogs, leaving my wife and young kids in the doo-doo as I'm the only current wage-earner in the family.

His hard-sell and guilt-enducing talk ("think of your youngest son... little A*****.... only 18 months old... no father and sooo many debts to pay..."). This really wound me up and I informed them that Royal Mail has a suitable Death in Service payment for my needs so should the worst happen, my young family will not be cast out onto the street, despite his dire warnings, thank you very much.

I've now tried to find info about what this 'Death in Service' payment actually is without much luck. I vaguely remember reading about it in some of the endless RM literature in the last year or so, soon after I joined the company, but can't find it now.

If it's of any relevance, I'm on a permanent part-time contract, been employed with RM over a year - I'm pretty sure though that I remember reading that the Death in Service payment is something you're eligible for from day one of working for the company.

Any advice or pointers would be appreciated, anything to stop my wife from thinking that that creepy mortgage dude actually had a point - that'd be awful!

[DGP1]

You should always have your own life assurance, you shouldn't rely on an employers one.
Anyway, is it not attached to the pension scheme?

[wannabeek]

I don't think it's attached to the pension scheme - I only became eligible to join that after 12 months with the company which was fairly recent - the death in service info came up way before that.

Why should I not rely on an employer's scheme? If my death in service in employment will pay off my family's mortgage it seems peculiar to me to pay for extra cover when not required, no?

[PhilthyPhil]

It will tell you how much your death in service lump sum is on your annual pension illustration

[DGP1]

Trust me, you'll need more than what you'll get from an employer.

I know mine comes with my pension updates, maybe it doesn't mean you need to be in the pension scheme to get the payment but I would never risk it (I personally have several policies paying out more than the mortgage plus whatever RM gives me).

[wannabeek]

Several policies? Wow, I'm not suggesting that to the Mrs, I didn't like it as it was the way her eyes lit up when I said 'Death in Service payment'. I'm gonna be sniffing my horlicks carefully tonight I reckon...

[DGP1]

Several policies? Wow, I'm not suggesting that to the Mrs, I didn't like it as it was the way her eyes lit up when I said 'Death in Service payment'. I'm gonna be sniffing my horlicks carefully tonight I reckon...

Depends on how long you've been married................sometimes you wish death would take you

[dvbuk55]

Twisting the heart strings that bloke. I think it's two years salary as a lump sum and your wife would receive 50% of your pension entitlement, provided she doesn't remarry, for life - there is also provision for children up to, I think age 18, providing they are still in education. In the event of both parties being deceased the children become entitled under certain circumstances.

It takes me back a long time, when someone once asked me how much he'd get when he died and I flippantly replied - nothing because you'll be dead - he was serious of course and in this day and age it is more important than ever.

[POSTMAN]

I think on my last pension illustration i was worth nearly £80k.
Depending on how much extra insurance costs,if the you know what happens,then surely the more the (not so much merrier but you know what i mean) is better for the family.

[Puppetmaster]

Life insurance to cover a mortgage is cheap,not to have enough life cover when you have young kids is iresponsible.
Just because mortgage is paid what about other debts and expenses.

[wannabeek]

Here we go, I rootled around in my 'boring RM Literature' box and found it eventually:

[analogsynthman]

I thought all mortgage lenders needed proof of a life cover policy.
I still pay mine even though the mortgage is paid off, £10 a month for me and the wife, it's a bargain.
Although the ammount i/we would get is a decreasing ammount, in line with the original decreasing mortgage dept.

[mr ford]

You should always have your own life assurance, you shouldn't rely on an employers one.
Anyway, is it not attached to the pension scheme?

why should you ? why would i want to pay scam insurance brokers when i dont need to ?

[RobertT]

You could try looking at the defined contribution pension website for more info:
http://www.zurich.co.uk/royalmaildcplan ... n/faqs.htm" onclick="window.open(this.href);return false;

[mpl1111]

the payment of death in service is a 1 of payment for your next of kin. Depending on the size of your mortgage the lump sum for death of service. May not be big enough to cover your outstanding mortgage it is not linked to pay your mortgage off. So dont rely on death of service payment from your royal mail pension. You do need a life insurance cover on your mortgage though buy it anywhere just dont buy it from pushy salesman. Check your latest pension statement for how much lump sum is or ring human resources details back of wage slip