What Is An Employee Death Benefit?
An employee death benefit provides a lump sum payment to the employee's family or nominated beneficiaries in the event of their passing away while in active employment. It is sometimes referred to as the 'death in service' benefit and helps provide loved ones with immediate financial support during a time of great difficulty.
Unlike personal life insurance policies, which are underwritten individually and often require medical examinations, employers typically include death benefits within broader employee welfare packages.
This arrangement is particularly valuable in the construction sector, where physical labour and site-specific risks can make securing personal coverage more challenging or expensive.
Typical benefits include:
Death from any cause: a set lump sum payment if an employee dies while covered by the scheme. For example, under the ECIA National Agreement, this is £35,000.
Accidental death benefit: This provides a higher lump sum if death occurs due to a workplace accident or while commuting. Depending on the scheme, the payment can be £40,000 or more.
Conditional cover: In some agreements, the death benefit is only payable in certain circumstances, such as if there has been no site walkout or related industrial action.
Employers make payments to the employee's chosen beneficiaries. To support the process, staff should complete an Expression of Wish form with their employer. Completing this form helps trustees distribute benefits fairly and in line with the employee's intentions.
Welplan administers employee death benefits through discretionary trust schemes. Although benefits are not legally guaranteed, trustees approve over 99% of claims. Families receive fast and fair support, with no lengthy disputes or hidden exclusions.
Common Misunderstandings About Life Insurance Vs Death In Service
Many employers and employees confuse life insurance with an employee death benefit (often called death in service cover). While they serve a similar purpose, providing financial support to dependents after a death, there are significant differences.
Life insurance
- Purchased individually, usually through a financial adviser or insurer.
- Premiums vary depending on age, health history, and lifestyle.
- Requires medical checks or health disclosures before cover is agreed.
- The policy belongs to the individual, not the employer.
Death in service (employee death benefit)
- Arranged by the employer as part of a group benefit scheme.
- No medicals or health checks are required for employees to be covered.
- Typically provides a fixed lump sum or multiple of salary (e.g. £35,000–£40,000 under construction agreements).
- Scheme trustees review each case and approve over 99% of claims, providing financial support at their discretion.
Because there are no medical barriers to entry, employee death benefit schemes are particularly valuable for construction firms. They make sure all staff, regardless of background or health, can access protection that might otherwise be unavailable or unaffordable through personal policies.
Employers should also note that these benefits do not replace personal life insurance. Many employees will still choose to hold their own cover in addition to workplace protection, especially if they want higher payouts or mortgage protection.
What Employers Need To Provide In Construction Roles
In the UK construction sector, welfare benefits, including death benefits, are often set out in national agreements such as the ECIA National Agreement (NAECI) and the Thermal Insulation Contractors Association (TICA) Agreement. These agreements require employers to provide a defined level of protection for their operatives.
For example:
Under the ECIA NAECI scheme, employers must provide:
- Death from any cause: £35,000
- Accidental death (workplace or commuting accident): £40,000
Under the TICA Agreement, the scheme provides operatives with cover for:
- Death from any cause: £40,000
- Cover continues up to age 75, but at that stage, benefits only apply if death is the result of an accident at work or travelling to/from work.
Employers participating in these schemes must:
- Be members of the relevant industry body (e.g. ECIA or TICA).
- Pay contributions on behalf of all eligible employees. These contributions finance the discretionary trust funds that provide benefits to the recipients.
- Ensure employees complete and update Expression of Wish forms so trustees know how to distribute benefits fairly.
- Continue contributions while employees are on sick leave, annual leave, parental leave, or other permitted absences.
Fulfilling these requirements reflects a strong commitment to employee well-being. In the construction industry, this matters greatly, as workers frequently encounter higher physical risks than those in other sectors.
How Trustees Manage Payouts And Decide Who Receives Them
When an employee covered by a death benefit scheme passes away, the employer notifies Welplan, which then administers the claim through the relevant discretionary trust.
Who receives the payout?
Benefits are paid to the employee's nominated beneficiaries, as indicated on their Expression of Wish form.
If the employee has not completed a form, trustees will decide how best to distribute the benefit, typically to immediate family or financial dependents.
Trustees have complete discretion over payments, which avoids delays associated with probate and ensures that money reaches families quickly when it is most needed.
How quickly are payments made?
Welplan has a strong track record of settling death benefit claims within two working days.
Over 99% of claims are approved and paid, reflecting the scheme's people-focused approach.
Trustees carefully investigate each case, providing fair and timely support rather than finding reasons to decline a claim.
Typical payout amounts
£35,000 for death from any cause under ECIA schemes.
£40,000 for accidental death under both ECIA and TICA schemes.
Some agreements include additional conditional benefits, such as withholding payments if a death occurs during an industrial walkout.
This structure ensures that families receive financial support swiftly, reducing the immediate financial burden of funeral costs, mortgage payments, or day-to-day living expenses.
How Welplan Supports Employers With Claims And Communication
Administering a death benefit claim can feel daunting for employers, especially when it happens during a sensitive and emotional time. Welplan is structured to alleviate pressure on employers and ensure families receive support quickly and fairly.
Dedicated claims support
- All claims are managed directly by Welplan's UK-based in-house team rather than outsourced to call centres.
- Employers receive step-by-step guidance on the process, from notifying Welplan to completing necessary documentation.
- Claims are generally paid within two working days, ensuring minimal delay for families.
Clear communication with trustees and families
- Trustees review each case independently and aim to distribute benefits fairly, guided by Expression of Wish forms wherever possible.
- Welplan communicates directly with employers throughout the process, helping them to update staff representatives or family members with confidence.
Proactive employer support
- Welplan provides template Expression of Wish forms, guides, and claim documentation to simplify compliance.
- Employers can tailor schemes to suit different employee groups, ensuring the right level of cover across their workforce.
- Because schemes are funded collectively through discretionary trusts, there are no medical checks or exclusions, making cover easy to provide to all employees.
By combining fast payments with hands-on employer support, Welplan helps construction businesses meet their welfare obligations while showing genuine care for their workforce.
Why Fast, Reliable Payment Matters In A High-Risk Sector
Construction is one of the UK's most high-risk industries, with employees exposed to physical hazards such as heavy machinery, working at height, and demanding site environments. Sadly, this means unexpected accidents and health-related deaths can and do occur.
For families, the sudden loss of income can be devastating. Funeral expenses, mortgage payments, and everyday living costs can add financial strain to an already difficult time. That is why speed and certainty of payout are so important.
With Welplan:
- Claims are typically paid within two working days, providing families with rapid access to funds when they need them most.
- Over 99% of claims are approved, providing reassurance that support will be available when it matters.
- Cover includes all causes of death, including cancer, heart attack, and even suicide, which are among the most common claims in the sector.
By offering a reliable and compassionate death benefit scheme, construction employers show their commitment to employee welfare and the families who rely on them. This clear support builds trust, employee morale, and strengthens staff retention in a competitive labour market.
Next Steps: Get Support With Employee Death Benefits
Providing a death benefit is one of the most valuable commitments a construction employer can make to their workforce. It not only protects employees' families but also strengthens employees ' loyalty across your business.
Welplan has supported construction employers with tailored employee benefits since 1960. Our discretionary trust schemes pay out in more than 99% of cases, supported by a UK-based team that understands the realities of the sector.
Visit Welplan's Death Benefit Guide pages to see how Welplan's cover works in detail, including benefit levels, eligibility, and claims processes.
Or, if you're ready to discuss setting up your scheme, contact our team today at welfare@welplan.co.uk or call 0800 195 8080.