ONS excess deaths data highlights need for employers to provide death-in-service benefits

by | Jan 31, 2023

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GRiD, the industry body for the group risk sector, believes the recent excess deaths data published by the Office of National Statistics demonstrates the need for death-in-service support, otherwise known as group life assurance.

According to ONS, in the week ending 13 January 2023, 17,381 deaths were registered in England and Wales; this was 19.5% above the five-year average1

While the root cause of these deaths is much debated, the fact remains that the early passing of these individuals could leave many households without a breadwinner or source of income. GRiD wants more employers to consider offering group life assurance to their employees to ensure that in the event of the death of a member of staff, the employer can offer a financial safety net to their family and dependants.

What is death in service / group life assurance?


Death in service is a payment made by an employer to the family of a deceased employee. It is usually paid as a tax-free lump sum and is generally calculated as a multiple of the employee’s annual salary but can also be a taxable pension, or both. The exact amount can vary between employers but a payout of around four times a salary is typical. This substantial sum of money can be used by dependants to continue mortgage payments, pay for the funeral, or cover any other financial commitments.

The latest data from the GRiD 2022 Claims Survey shows that in 2021 the industry paid out 13,479  death claims at an average of £116,414, and Swiss Re Group Watch 2022 highlights that 10.51 million employees are insured for death in service benefits.

Katharine Moxham, spokesperson for GRiD, said: “During COVID, we saw many more people become aware of their own mortality and that of their close family, but as life returns to normal, it’s human nature to think these things won’t happen to us. However, this data is a stark warning that many families are indeed losing loved ones unexpectedly. This heartache can be hugely amplified, especially if the remaining family are not able to cope financially.”


GRiD warns that the product name ‘death in service’ can be misunderstood and that employees may not fully understand that the product simply pays out if the individual is insured and is on the payroll – they do not need to die in the workplace itself to qualify for the benefit.

Death in service is generally of a significantly lower cost than other group risk products. A further benefit to the employer is that premiums can generally be offset against corporation tax. 

Katharine Moxham continued: “This is very much a peace-of-mind benefit. The employee will never see the funds but they can benefit by having the reassurance that should something happen to them, their family will not struggle for money in the short term.”


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