My Macmillan

Life insurance

There are four main types of life insurance.

Death-in-service benefit

Many employers also offer life cover to employees. Cover is usually available to every employee up to a set limit, whatever their state of health. Speak to your HR department at work to find out more. Many employers offer a type of life insurance called ‘death-in-service benefit’. Death in service benefit guarantees a lump-sum payout if you die while working for that employer.

You can usually choose who you would want this payment to go to (your beneficiaries). However, sometimes death-in-service payouts go into a discretionary trust, which means you cannot choose exactly who will benefit.

If you consider giving up your work due to ill health, check with your employer what would happen to any life insurance cover they provide.

Over-50s plans

Over-50s plans are designed to pay a lump sum of money into your estate when you die. They’re mainly intended for anyone aged 50–85 who doesn’t already have a life insurance policy.

People with life insurance can still buy over-50s plans and may choose to if they are saving for a particular purpose (such as paying for a funeral) and want to keep this separate from their life insurance.

Getting money early from life insurance

If you cash in or sell your life insurance policy, it won’t pay out to your beneficiaries when you die. You may want to think about how they would manage financially before making a decision.

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