B
Beneficiary
The individual(s) nominated by an employee to inherit their death in service lump sum (normally a spouse, partner or family member). This does not guarantee the benefits will be paid to the nominated individual(s). The lump sum is held in a trust and the trustees have absolute discretion over who the payment is made to.
Benefit
The amount of money stipulated in a death in service insurance policy to be paid out if an employee dies.
Benefits package
A collection of benefits and perks offered by employers to attract and retain staff.
Business or corporate trust
A trust set up and run by a business to manage and administer an employee trust. For more information, see our ‘Considerations for employers when setting up a death in service insurance scheme’ section.
C
Claim
A request for a lump sum payout under a death in service insurance policy when an employee dies.
D
Death in service insurance
An insurance policy taken out by an employer. It provides a lump sum payment if an employee dies while employed by the employer. For more information, see our 'What is death in service insurance?’ guide.
Deceased's estate
The property that a person leaves behind when they die. This can include property, possessions, and money, as well as debts, mortgages, loans, and credit card bills.
E
Employee benefit
A perk given to employees which is not related to their salary.
Expression of wish
A form where your employees can state who they would like to receive the payout from their death in service policy. The trustees will ultimately decide who should receive the payout. They will consider the employee’s circumstances at the time of death, and their wishes recorded on this form.
F
Free cover limit
The amount of cover that a provider will offer an employee without requiring any medical information or tests.
G
Group life insurance
Another term for death in service insurance. An insurance policy taken out by an employer. It provides a lump sum payment if an employee dies while employed by the employer. For more information, see our ‘What is death in service insurance?' guide.
Guaranteed rate
This is the length of time a provider will guarantee the cost of your premiums will not increase.
I
Insurance premiums
The price paid for an insurance policy.
Intermediary
A person or business who arranges insurance cover with providers on behalf of their customers.
L
Level of cover
The amount of benefit that will be paid out under the policy.
Lifetime allowance
The total amount an individual can save in all personal and workplace pensions before paying an extra tax. This does not include the state pension.
Lifetime allowance tax charge
The charge payable on any value, when taken, above the lifetime allowance. Different tax rules apply to excepted schemes.
Lump-sum payment
A one-off payment made to the death in service insurance policy trustees when an employee dies.
M
Master trust
A trust set up and run by a third party to manage and administer an employee trust. For more information, see our ‘What is a master trust?’ guide.
N
Nominee or nominated person
The person chosen by an employee to receive a lump sum payment under a death in service insurance policy, in the event of an employee's death. The scheme trustees will take this nomination into account when paying out a claim.
P
Policyholder
The employer who takes out death in service insurance as a benefit for their staff.
R
Risk factors
Information providers look at to decide how much to charge for an insurance policy, such as postcode, and the industry a company works in.
S
SME
Small to Medium Enterprise - generally a small or medium sized business.
T
Trust
Death in service insurance policies are usually set up under a trust. This means that the payout does not form part of the deceased's estate and is not subject to inheritance tax.
Learn more by reading our 'Considerations for employers when setting up a death in service insurance scheme’ section.
Trustee
A person who is responsible for making decisions and administering a trust for the benefit of its beneficiaries.
Underwriting
The process to determine whether you (or your employees) are eligible for cover, and if so, how much your premiums will cost.