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Death in service benefits for GP locums have been heavily publicised recently. The issue is that if a locum GP dies outside a period where they are contracted to work, they are not covered for death benefits in the same way as a salaried GP or GP partner with the same work pattern.
The BMA has raised this inequality several times in the past and it is something we are currently in discussions with the Department of Health and NHS Employers to address.
In the meantime, I thought it would be useful to outline the current situation.
If you work exclusively as a GP locum, you will only receive death in service benefits if you die while contributing to the scheme (ie, ‘in service’).
For example, if you were scheduled to locum for a practice for four weeks and were to die on a Sunday during those four weeks, your spouse, nominated person or estate would receive a lump sum based on what your pension would have been had you retired on the date of your death.
If, on the other hand, you are scheduled to locum for a practice for five days from Monday to Friday of one week and you were to die on the Friday evening, after your scheduled work had ended, no death in service payment would be payable. You would, however, be entitled to different benefits, calculated as if you had died within a year of leaving the scheme.
This reduction in benefits disproportionately affects younger GPs more because they won’t have contributed so much.
So, if we assume you are a 45-year-old GP locum with average earnings of £80,000 per year, who has built up a pension of £20,000 at the date of death:
In either case, the benefit payable is significantly less than the £160,000 (2x £80,000) that would be due if you died while ‘in service’.
Therefore, if you work exclusively as a GP locum, you may wish to consider insuring against the loss of death in service benefit. Based on the examples above, you would need to insure against loss of either £100,000 (£160,000 - £60,000) or £119,500 (£120,000 - £45,500).
This can be relatively cheap, and is cheaper the earlier you take out the insurance. To give you an idea, we were quoted the following
Life Cover for non-smoker
Assumed Income: £80,000
Sum Assured: £119,500
Age 30: £8.31 per month
Age 40: £12.91 per month
Age 50: £22.32 per month
For more information, please see the Death in service FAQs on the BMA pension pages. In addition, BMA members can contact the BMA pensions team on 020 7383 6138 for advice or BMAS on 0845 609 2008 for tailored financial services.
I would like to know more about insurance & death in service as freelance/locum GP.
Dr K D Sharan
Each case has individual circumstances, but please see above for further advise in the death in service FAQSs and contact numbers for BMA members.
Many thanks for the helpful article. Would it be possible to provide some additional information in future articles covering locums working consecutively in multiple practices? Is once a week in a practice considered continual service for example? What about once a month?