Non-motoring > Employees Life Insurance - Beware` Tax / Insurance / Warranties
Thread Author: zippy Replies: 6
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New Wed 26 Feb 25 16:44 
 Employees Life Insurance - Beware` - zippy
For those still in work and relying on employers life insurance beware...

Someone who I used to work with passed away recently. He had 10x pay cover.

He became ill and sadly died within the period of a month. The insurance company is not paying out as he was off ill and therefore was not doing "useful work for the company", which is a clause in the contract and apparently a clause in many similar work schemes.

Very sad as it has denied the family a pay out of approximately £650,000!
Last edited by: zippy on Wed 26 Feb 25 at 16:44
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New Wed 26 Feb 25 16:48 
 Employees Life Insurance - Beware` - CGNorwich
Best to have your own life insurance and regard Company cover as an extra. Term Life insurance is cheap enough . I'm surprised more people don't take it out especially if they have dependants
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New Wed 26 Feb 25 16:49 
 Employees Life Insurance - Beware` - smokie
That's outrageous but not surprising these days I suppose. I wonder if the employer realised the limitations of the scheme.

I'm always a bit sceptical of things given away "for free". I recall we had a premium bank account at one time, which gave us free holiday insurance. However when compared side by side with proper holiday insurance there was lots not covered, and some very low limits.
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New Wed 26 Feb 25 16:55 
 Employees Life Insurance - Beware` - Manatee
Sounds like an Ombudsman job. What are you supposed to do, die instantly? If you were incapacitated for half an hour by a heart attack before dying, would the half hour of not doing any useful work make the insurance void? Where's the line?

If it's the kind that I had for many years, it's offered as a benefit, normally linked to pension scheme membership, for "death in service", not "at work"..

Hard to die without being incapacitated I would say.
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New Wed 26 Feb 25 16:59 
 Employees Life Insurance - Beware` - zippy
>>Sounds like an Ombudsman job.

I agree, but it's not something that a grieving family should have to do.
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New Wed 26 Feb 25 17:05 
 Employees Life Insurance - Beware` - Manatee
And I agree with that too.

Of course we don't know what, if any, conditions were communicated. But the rationale for these schemes seems obvious. If Fred, the breadwinner, were to die then what would his dependants do without his wages? Answer, he has 'free' insurance for death in service, no worries on that score.

Fred would have had a hard time taking out his own insurance when he's already suffering from something that's possibly going to kill him, wouldn't he?

I assume it is actually insured, and not a pension scheme benefit that rests on the scheme itself?
Last edited by: Manatee on Wed 26 Feb 25 at 17:06
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New Wed 26 Feb 25 17:09 
 Employees Life Insurance - Beware` - Manatee
Smokie's right about (some) free stuff though. A popular freebie along with free Parker pens etc for various financial products was "free accidental death cover". Accident cover is as cheap as chips because most people don't contrive to die by accident. If you need life insurance, you need comprehensive cover.
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