Could Your Business Be Paying Too Much for Death in Service Cover? Get Your Quota of Quotes or Pay the Price

Chamber member Drewberry say that many SMEs are overpaying for the death in service cover they offer staff due to not undertaking annual reviews comparing rates across all insurers.

Brighton being named the UK’s best place for starting a business means we have a thriving community of small businesses, but when it comes to providing employee benefits to their staff they often don’t receive the service they deserve and end up paying too much.

Death in service is often the first benefit introduced and from then on forms the core of any employee benefits package a small business wants to offer its workers. That’s because it’s relatively cheap, simple to understand and appreciated by both employees and their families alike. However, without proper due diligence, it’s easy for a small business to find themselves paying over the odds for this valued protection.

Nadeem Farid, Employee Benefits Expert at Drewberry, says that given you have to take your employee data to each provider individually it’s common for the time-pressed small business owner to not get quotes from across the market. However, this can prove a costly mistake.

“There’s an entire marketplace out there for employee benefits that you could be leaving untapped by only getting a couple of quotes, meaning you might be missing out on the best deal,” says Nadeem.

“Around 90% of the clients who come to Drewberry looking to renew an existing Death in Service Scheme have been paying over the odds for cover for years. This is generally down to them either having a relationship directly with the insurer with no prompt to do a regular full market review or they have an adviser who is not providing the regular service that they should be.”

Why Offer Cover?

Death in Service Insurance can offer various benefits to both employers and employees:

●     Employee benefits are a big attraction for potential employees – according to Investors in People, 44% of UK employees considered company benefits to be one of the most important qualities that attract them to a new company

●     Meanwhile, 1 in 5 workers are fed up in their jobs because of a lack of employee benefits

●     Death in Service is one of the cheapest employee benefits insurances on the marketplace

●     Drewberry research found that only around 1 in 3 UK adults has Life Insurance, making Death in Service Cover a valuable addition to many people’s lives.

How Do I Get Cover?

If you’re a small business thinking of implementing a Death in Service scheme, you’ll have to get quotes the old fashioned way. There’s no online price comparison for group cover like we’re used to for individual protection – quotes are trickier to obtain and require more detailed information about your employees.

This means manually taking data on each individual employee – including dates of birth, salaries, occupations and where they’re normally based for work – to every insurance provider on the market to find the most competitive quote.

Using an adviser to review the whole market...

While a full market comparison is essential, it’s admittedly time-consuming. So rather than spending your valuable time chasing down every UK insurer when you’ve got a business to run, Nadeem is keen to point out that there’s an easier alternative and in most cases, there is no additional cost to the business. “Why not simply pop those details over to an employee benefits adviser and sit back and relax while they do all the legwork on your behalf?” he suggests.

“Advisers know the market inside out and are best-placed to not just compare on price but also on any additional benefits that might come with a policy. This might include access to legal / counselling helplines or telephone-based GP and nurse services, which are hugely worthwhile additional options for your employees to have on hand.”

Overall, while Death in Service makes for a valued addition to any small business, that doesn’t mean you should pay through the nose for the privilege of protecting the workers who’ve helped make your company what it is today.

Thank you to Bronja Whitlock of Drewberry for providing this blog.

If you want to contribute to the Chamber blog, contact us on hannah@brightonchamber.co.uk