Do I Really Need Life Insurance If I Get It Through Work?

What Is Life Insurance Through Work?

Life insurance through work is often called Death in Service. Employers pay a lump sum to your family if you die while employed. The payout is usually a multiple of your salary (for example, 2x–4x your pay).

It’s a great benefit, but it’s not a full personal policy. It’s designed as a basic safety net for employees.

The Limits of Employer-Provided Life Insurance

Here are the common limits you should know about:

Low cover amount

2x–4x salary may not cover mortgage, debts, living costs or children’s future.

Cover ends with employment

If you change jobs, go self-employed or are made redundant, most workplace cover stops.

No personal control

You can’t choose the insurer, increase cover, or add features like critical illness cover or trusts.

Limited benefit options

Employer policies rarely pay extra for things like funeral costs, phased payouts, or tax planning.

No partner or family cover

Work policies usually cover only the employee, not a spouse or dependent partner.

When Work Life Insurance Might Be Enough

For some people, employer cover may be enough for now:

You are single with no dependents.
You have little or no mortgage or debt.
You are building savings and don’t rely on full income replacement.

Even if that’s true today, consider whether it will still be true in 2–5 years.

When You Definitely Need Personal Life Insurance Too

You should consider a personal policy if you:

Have a partner, children or dependents.
Own a home or have a mortgage.
Have significant debts or long-term financial commitments.
Plan to change jobs or go freelance/self-employed.
Want more control over how a payout is used (trusts, lump sum, staged payments).

A personal policy stays with you—no matter where you work—and can be tailored to your needs.

Why Relying Only on Work Cover Can Be Risky

Relying only on employer life insurance creates key risks:

Your employer can change or remove the policy.
A job change can leave you uninsured overnight.
Future health issues may make personal cover expensive or unavailable.
Your family might not receive enough to maintain their standard of living.

Taking out personal cover while you’re healthy locks in better rates and certainty.

Final Thoughts

Employer-provided life insurance is a useful perk but rarely enough as a sole protection. For lasting security, many people need personal life insurance to fill the gap. A short review will show whether your work policy truly protects your family—and what to do next.

Quick steps: