Employer or Union Death Benefits

Financial Help Families May Overlook 

After someone dies, families often begin with the financial resources they already know about. They look for life insurance policies, check bank accounts, contact Social Security, and, if their loved one was a Veteran, investigate Veterans burial benefits.

But there's another place that's easy to overlook:

Their job.

If your loved one was employed, retired from a longtime employer, belonged to a labor union, participated in an employer retirement plan, or received benefits through a professional or employee organization, there may be money or survivor benefits available that your family doesn't know about.

Not every employer or union provides these benefits, and the amount and eligibility requirements vary considerably. But this is absolutely worth investigating before assuming you've found every available resource.

Start by Calling the Employer's Human Resources Department

If your loved one was working when they died, contact their employer's Human Resources or benefits department as soon as you're able.

You don't need to know exactly what you're looking for. In fact, I would ask a very broad question:

My loved one recently passed away. Could you please tell me about every benefit, payment, insurance policy, retirement benefit, or other amount that may be payable to their beneficiaries or estate?

That's better than simply asking, "Did they have life insurance?"

You don't yet know what you don't know.

Ask Human Resources to explain everything associated with the employee's benefits package and whether there are forms that a spouse, beneficiary, or estate representative needs to complete.

Ask About Employer-Provided Life Insurance

One of the first things to investigate is group life insurance.

Many employees receive some amount of life insurance through work, sometimes automatically as part of their employee benefits and sometimes through optional coverage they elected and paid for through payroll deductions.

Your loved one may have had coverage without the family thinking of it as a traditional "life insurance policy" because there wasn't a separate bill arriving at the house every month.

Ask Human Resources whether the employee had basic life insurance, supplemental life insurance, accidental death coverage, or any other death-related insurance through the workplace.

If coverage existed, ask for the insurer's contact information, the amount of coverage, the named beneficiary information if they are permitted to provide it, and instructions for beginning a claim.

Generally, life insurance proceeds paid to a beneficiary because of the insured person's death aren't included in the beneficiary's gross income, although there are exceptions and interest paid on the proceeds may be taxable. The IRS provides current guidance if you need to determine how a particular payment should be handled.  

Don't Forget About Retirement and Pension Benefits

This is another area families can easily miss.

If your loved one participated in an employer-sponsored retirement or pension plan, there may be money payable to a surviving spouse or another designated beneficiary.

The IRS explains that when a retirement-plan participant dies, benefits they would have been entitled to are generally paid to the designated beneficiary according to the terms of the plan. Depending on the plan, that might take the form of a lump-sum distribution or an annuity.  

If you're the surviving spouse, there may be additional protections. Federal law protects certain survivor rights for spouses of participants with vested pension benefits. The exact benefit depends upon the type of plan and the choices previously made by the employee.  

This is why it's important to contact the plan administrator, not simply assume that retirement benefits stopped when your loved one died.

What If You Don't Know Where the Pension Is?

People change jobs.

Companies merge, close, reorganize, or change names. Someone may have earned a pension decades ago and the surviving family may have no idea where to begin looking for it.

If you're trying to locate a traditional pension from a former employer, the federal Pension Benefit Guaranty Corporation can be an important resource.

PBGC administers benefits for certain terminated private-sector defined-benefit pension plans and provides information about survivor benefits. For some married participants who die before beginning pension payments, a surviving spouse may be entitled to a Qualified Preretirement Survivor Annuity.  

Even if you're uncertain whether this applies to your loved one, it's another avenue worth checking rather than simply assuming an old pension disappeared.

If Your Loved One Belonged to a Union, Call the Union Too

Don't assume the employer and union have exactly the same information.

If your loved one was a union member, contact the local union office or the union's benefits office directly.

Ask whether membership included any death benefit, life insurance, pension, survivor benefit, burial or funeral assistance, or other payment to a beneficiary.

Some employee-benefit arrangements associated with unions can provide life, accident, or similar benefits to members, dependents, or designated beneficiaries. The IRS recognizes Voluntary Employees' Beneficiary Associations, or VEBAs, that can be based on a common employer or labor-union membership and provide these types of benefits.  

The important point for a grieving family isn't understanding all of the terminology.

It's knowing to make the phone call.

Ask About Final Pay and Other Money Still Owed

Death doesn't necessarily erase money an employer already owed the employee.

Ask Human Resources whether there is a final paycheck and whether company policy or applicable law provides payment for accrued vacation, paid time off, bonuses, commissions, expense reimbursements, or other compensation.

What is payable—and who receives it—can depend on the employer's policies and state law, so don't assume every item will apply.

Just ask.

A good question is:

Is there any compensation, reimbursement, accrued benefit, or other money that was owed to my loved one at the time of death?

That one question may uncover something you didn't know to request by name.

What If the Death Was Related to Work?

If your loved one's death resulted from a workplace injury or occupational illness, there may be an entirely different category of benefits available.

Workers' compensation death benefits are generally governed by state law, so eligibility and payment amounts depend upon where the employee worked and the circumstances surrounding the death.

Certain workers covered by federal programs may also have specific survivor and funeral benefits. For example, the U.S. Department of Labor administers programs in which eligible survivors may receive death benefits and funeral-expense assistance when a covered workplace injury causes the employee's death.  

If the death may have been work-related, contact the employer and the appropriate workers' compensation agency rather than assuming ordinary employee benefits are the only possible source of assistance.

Federal Employees May Have Additional Survivor Benefits

If your loved one worked for the federal government, there are specific federal death and survivor benefits worth investigating.

The U.S. Office of Personnel Management explains that survivors of federal employees or retirees may qualify for monthly survivor annuities or lump-sum benefits. Under the Federal Employees Retirement System (FERS), certain surviving spouses may also qualify for a Basic Employee Death Benefit when eligibility requirements are met.  

If your loved one was a current or retired federal employee, don't rely only on general advice from a funeral article.

Go directly to OPM's Survivor Benefits information and determine which rules apply to your situation.

Gather a Few Documents Before You Call

You don't have to have everything perfectly organized before making the first phone call, but having a few documents nearby can make the process easier.

You may eventually be asked for a certified death certificate, your loved one's employee identification information, Social Security number, marriage certificate or other proof of relationship, beneficiary information, and retirement or insurance paperwork.

The IRS notes that a retirement plan will likely request a death certificate when a surviving spouse or beneficiary makes a claim.  

Keep a simple notebook or folder with the name of each person you speak with, their phone number, the date you called, what they told you, any claim numbers, and what you're supposed to do next.

Grief can make even ordinary details difficult to remember. Write things down so you don't have to carry all of it in your head.

Ask About Benefits From Former Employers Too

This is one I especially don't want families to overlook.

Your loved one's current employer may not be the only employer worth contacting.

Think about previous jobs where they worked for a significant period of time. Did they earn a pension? Leave money in a retirement plan? Maintain some type of retiree benefit? Belong to a union connected with that employment?

You may need to look through old tax documents, retirement statements, pay stubs, emails, or files to identify previous benefit plans.

It may take a little detective work.

But if there's money that your loved one earned and intended for their family, it's worth finding out.

Don't Assume Someone Else Will Contact You

Perhaps the most important advice in this article is simply this:

Make the calls.

Don't assume the employer will automatically locate you. Don't assume the union knows your loved one died. Don't assume a pension administrator has current beneficiary contact information. And don't assume that because you haven't received a letter, there aren't benefits available.

Contact the employer.

Contact the union.

Ask about insurance.

Ask about retirement accounts.

Ask about pensions.

Ask about final compensation.

Ask whether there is anything else payable because of the employee's death that you haven't thought to ask about.

You aren't being greedy.

You're finding out what benefits your loved one earned during their working life and what resources may now be available to the people they left behind.

Employer and Union Benefits Can Be One Piece of the Funeral-Cost Puzzle

Even when workplace benefits exist, they may not arrive quickly enough—or be large enough—to cover every immediate funeral expense.

That's why I think families should look at funeral funding as a combination of possible resources rather than searching for one source that pays for everything.

You may have employer benefits, a pension, Veterans burial benefits, Social Security benefits, community assistance, life insurance, savings, family contributions, or money raised through an online funeral fundraiser.

Visit our Help Paying for a Funeral Resource Center to work through the different possibilities one at a time.

Sometimes the answer isn't one large source of money.

It's discovering several smaller sources you didn't know were available.

Final Thoughts

When someone you love dies, calling their employer probably isn't high on the list of things you want to do.

But it can be an important call.

Your loved one may have spent years—or decades—working for an employer, contributing to a retirement plan, paying union dues, electing employee benefits, or building a pension.

Some of those benefits may have been specifically designed to protect the people they loved after they were gone.

So before you assume there isn't anything there, ask.

You may discover nothing beyond a final paycheck.

Or you may discover life insurance, pension benefits, survivor payments, union benefits, retirement funds, or other resources your family didn't know existed.

Either way, you'll know you checked.

And during a time when funeral expenses can feel overwhelming, that's one more financial door worth opening.