What lump sum death benefits are available?
Lump sum and dependant’s pension
- The lump sum is often a multiple of salary.
- In addition, a pension may be paid to a spouse or dependant.
- Unless the scheme is very big, these benefits are normally insured up to a certain amount known as the free cover level (FCL).
Free cover level/limit (FCL)
- This is the maximum amount an insurance company is prepared to insure a member of a group policy without any forms or medical information being required.
- The member is automatically covered and each year the benefit statement from the scheme will show the amount of cover.
Exceeding the FCL
- If a member is entitled to benefits that exceed the FCL, those benefits may be restricted to the FCL amount until a medical has taken place.
- Depending on the medical results, the limit will either be removed or remain in place.
- In some cases an additional premium may be required.
