Do teachers need life insurance and income protection?

What the Teachers' Pension pays if you die in service

If you die while you are an active member, the scheme pays a lump sum death grant of three times your full-time equivalent salary. There is no minimum qualifying period. On top of that it pays a pension to a surviving spouse, civil partner or qualifying partner, and pensions to dependent children.

For a lot of teachers that is a substantial amount of cover, and it costs nothing extra. Anybody selling you life insurance without first asking about it is not doing the job properly.

Where that cover stops

It is a benefit of being in pensionable service, not a policy you own. Leave teaching, move to a school or agency outside the scheme, or opt out, and the in-service grant goes with it.

Long sickness matters too. You are only treated as in pensionable service while you are receiving at least half your usual pay. Once sick pay runs out, so does the in-service death benefit, which is exactly the point at which a family is most exposed.

And three times salary is a figure set by the scheme, not by your mortgage. On a large joint mortgage with young children it may not clear the debt and keep the household going. It is worth doing the arithmetic once.

Supply teachers are usually outside it

Supply teaching through an agency is not pensionable under the Teachers' Pension Scheme, because agencies cannot take part in it. You will normally be auto-enrolled into the agency's workplace pension instead, which typically has no death-in-service benefit of anything like the same size.

Supply teachers employed directly by a school or local authority can be in the scheme. If you do a mix of both, check which days count. For agency supply teachers, life cover and income protection are often the whole of the safety net rather than a top-up to it.

Sick pay, and what income protection is for

Teachers on the Burgundy Book terms build up to 100 working days on full pay and 100 on half pay after four years of service. In your first years the entitlement is much smaller. Academies and independent schools can set their own schemes, so check your contract rather than assuming.

That is generous compared with most jobs, and it changes what income protection should look like. A policy that starts paying after four weeks duplicates sick pay you already have and costs more for it. A policy that waits until full sick pay ends, or until half pay ends, covers the actual gap and is considerably cheaper.

Teachers' Pension ill-health retirement exists for people who cannot return to teaching, but it is assessed by the scheme on medical evidence and is not something to plan a mortgage around.

What we would do

Start with what you already have: your Teachers' Pension membership, your sick pay entitlement, and anything a partner's employer provides. Then compare it to the mortgage and what the household costs to run.

Sometimes there is no gap and we will say so. Where there is one, it is usually filled by decreasing life cover matched to the mortgage, and income protection timed to start when sick pay runs out.

Insurance for teachers, answered

Do teachers get death in service?

Yes, if you are an active member of the Teachers' Pension Scheme. It pays a death grant of three times your full-time equivalent salary plus pensions for a surviving partner and dependent children. It stops if you leave the scheme.

What insurance do teachers already have?

Permanent and directly employed teachers usually have the Teachers' Pension death grant and survivor pensions, sick pay of up to 100 days on full pay and 100 on half pay after four years under the Burgundy Book, and access to ill-health retirement. Agency supply teachers usually have none of the death benefit.

Do supply teachers need life insurance?

Agency supply teachers more than most, because agencies cannot take part in the Teachers' Pension Scheme and its death-in-service benefit does not apply. Supply teachers employed directly by a school or council may be covered for those days.

Is income protection worth it for a teacher?

Often, but timed to your sick pay. A policy that starts when full or half pay ends covers the real gap and costs much less than one that starts after a few weeks.

Do teachers get a discount on life insurance?

Not in the sense of a teacher rate. Price depends on your age, health, smoking and the amount of cover. What being a teacher changes is how much cover you actually need.