The Protection Gap When You Leave a Job: What Ends on Your Last Day

Reviewed by the advisory team at Greenway Financial Advisors Ltd. · Updated September 2026

You hand in your notice, work your period, and on your last day you clear your desk. Your salary stops — you were expecting that. What most people are not expecting is that a set of insurance policies stopped on the same day, quietly, without a letter, an email or a phone call.

If your employer provided death in service benefit, group income protection or group serious illness cover, those are almost certainly gone. They belonged to the employer’s scheme, not to you. And the gap that opens up is at its widest during exactly the period when your income is least certain — between jobs, in a probation period, or in the first months of self-employment.

This guide sets out what actually ends, what the State pays if something goes wrong while you are uncovered, the one option that can let you keep some of your life cover without a medical, and what we would suggest doing about it. It is general information for the 2026 tax year and is not personal advice.

What Actually Stops on Your Last Day

It helps to separate the things you own from the things the employer was renting on your behalf.

Benefit	What happens when you leave
Pension savings built up in the employer’s scheme	Yours. They stay invested as a preserved benefit, or you can transfer them.
Death in service benefit (group life cover)	Normally ends when you cease to be a member of the scheme.
Group income protection (also called group salary protection)	Normally ends on your last day of employment.
Employer-paid serious illness or health cover	Normally ends, though health insurance can often be continued personally.
Statutory sick pay	Ends. It is an entitlement of employees, so it goes with the job.
Your own personal life or income protection policies	Unaffected. They are in your name and continue as long as you pay them.

The Pensions Authority puts the underlying point plainly: “Membership of an occupational pension scheme ceases when you leave that employment.” Everything the scheme provided — including the insurance benefits attached to it — follows from that membership.

Death in Service Benefit: What You Had, and Why It Goes

Death in service benefit is a lump sum paid to your family if you die while you are still employed. The employer arranges and usually pays for it through the pension scheme, which is why so many people are only dimly aware they have it. It commonly costs the employee nothing and never appears as a line on a payslip.

How much cover you probably have

Most Irish schemes provide somewhere between two and four times salary. Revenue sets the ceiling. Under the Revenue Pensions Manual, where an employee dies in service before normal retirement age, an approved scheme may provide a lump sum not exceeding the greater of €6,350 or four times the employee’s final remuneration. A refund of the employee’s own contributions, with or without interest, may be paid on top of that.

So on a salary of €70,000, the most that could be paid as a lump sum is €280,000 plus any refund of your own contributions. A scheme insured for more than the permitted lump sum cannot simply hand over the excess as extra cash — an approved scheme may instead provide a spouse’s, civil partner’s or dependant’s pension, itself capped by reference to the maximum ill-health retirement pension you could have received.

If you have never checked what your multiple is, that is the first thing to find out, and it is on your scheme booklet or your annual benefit statement. Our guide to death in service benefit covers how these schemes are structured.

The tax treatment you were getting

Two separate taxes matter here, and they behave differently.

Income tax. A lump sum paid on death to a spouse, civil partner, children, dependants or personal representatives is not subject to the tax charge that applies to retirement lump sums under section 790AA of the Taxes Consolidation Act 1997. In practice the money reaches the family without an income tax deduction.

Capital Acquisitions Tax. This is the inheritance and gift tax. Revenue states: “If you receive a gift or an inheritance from your spouse or civil partner, that gift or inheritance is exempt from Capital Acquisitions Tax.” So a payment to a husband, wife or civil partner is exempt outright. Payments to anyone else may create a liability. The current rate is 33%, and the tax-free thresholds applying to benefits taken on or after 2 October 2024 are €400,000 for Group A, €40,000 for Group B and €20,000 for Group C.

Where trustees pay a lump sum to someone other than a spouse or civil partner — adult children, a partner you are not married to, a parent — which threshold applies depends on how the payment is made and who is treated as giving it. That is worth a conversation rather than an assumption.

Why the cover ends

Group life cover is written as a policy over a defined group of people: the members of a particular employer’s scheme. Leave the employment and you leave the group. Irish Life’s specimen group life assurance policy sets out that a person ceases to be covered on “the day he withdraws from the service of the Employers” and, separately, “immediately on ceasing to be a member of the scheme”. Royal London Ireland make the same point to consumers in one line: “if you leave the company, you will lose the benefit.”

There is a wrinkle worth knowing. A scheme may give a deferred member — someone who has left but whose pension benefit stays in the scheme — a right to a death benefit before that pension becomes payable. Revenue’s guidance is permissive on this rather than mandatory, so whether anything continues depends entirely on your scheme’s rules. Do not assume it does, and do not assume it does not. Ask the trustees, and ask in writing.

The Continuation Option: A 31-Day Window Most People Never Hear About

This is the part of the article worth reading twice.

Some group life schemes include a continuation option: the right, on leaving, to take out an individual life policy in your own name without any new medical questions or examinations. For someone in perfect health it is a convenience. For someone who has developed a health condition since they were last underwritten, it can be the difference between having life cover and not being able to buy it at any sensible price.

Irish Life’s specimen group life assurance policy sets out how one version of this works. Where the option is specified to apply, a member leaving service before their 50th birthday is entitled, “on giving written notice to the Company within 31 days after such cessation”, to obtain “without evidence of health a new and individual policy for a term life assurance policy”. The amount is capped at the lower of four times salary at the date of leaving and €1,500,000, and the premium is charged at the insurer’s ordinary rates for your age at the time.

Aviva publish that they offer a continuation option too, on both group life and group income protection: “We offer a continuation option which allows an employee to take out an equivalent individual policy in their own name, should they leave the company.” Aviva do not publish the window, age limit or maximum, so those have to come from the scheme’s own technical guide.

Four things to hold on to:

• It is not a legal right. There is no statutory entitlement in Ireland to continue or convert employer life cover. It is a feature of a particular scheme with a particular insurer, and plenty of schemes do not include it.
• The window is short. Thirty-one days from the date cover ceases, in the Irish Life wording. Miss it and it is gone.
• You pay for it. The employer was carrying the cost; from here it is your premium, at individual rates for your current age.
• It may not cover everything. The Irish Life clause applies only to the portion of benefit that was not subject to medical exclusions or extra premiums.

Group Income Protection: The Cover People Miss Most

Group income protection replaces part of your salary if illness or injury stops you working for an extended period. It is the least visible employee benefit in Ireland and, for most working people, the most valuable one, because the risk of being unable to work for a year is considerably higher than the risk of dying in the same year.

Aviva state the position for their employer-sponsored group income protection scheme directly: “Your cover will end when you leave this job or when you reach the scheme retirement age, whichever is sooner.”

Aviva also list a continuation option on group income protection, allowing an employee to take out an equivalent individual policy “without the need for underwriting should they leave the company.” That is uncommon and worth checking for. We could not find a published continuation option on group income protection from the other insurers on our panel, so treat it as scheme-specific rather than something to expect.

What replaces it if you do nothing? Two things, in sequence, and both are smaller than people imagine.

Statutory sick pay stops with the job

Statutory sick leave is an employee entitlement, so it ends when the employment does. Even while you have it, it is modest: 5 days in 2026, paid at 70% of normal pay up to a maximum of €110 a day, for certified leave only. The Government confirmed in April 2025 that the entitlement would remain at 5 days rather than increasing to 7.

Illness Benefit is what is left

Illness Benefit is the State payment for people who cannot work because of illness. It is paid from Pay Related Social Insurance (PRSI) contributions and it is a flat rate, not a percentage of what you used to earn.

Average weekly earnings	Weekly personal rate 2026
€300 or more	€254.00
€220 – €299.99	€198.90
€150 – €219.99	€163.70
Under €150	€114.00

The maximum is €254 a week. On a salary of €70,000 that is roughly one fifth of your take-home pay. Three points people get wrong:

• There is no payment for the first 3 days of illness. Sunday is not counted as a waiting day.
• The rate is set from your average weekly earnings in the relevant tax year, not what you were earning last month.
• Self-employed Class S contributions do not give access to Illness Benefit. Only classes A, E, H and P count. If you are leaving employment to work for yourself, this is the sentence to reread.

Illness Benefit is paid for a maximum of 2 years (624 payment days) if you have at least 260 weeks of social insurance contributions paid, or 1 year (312 payment days) with between 104 and 259 weeks.

If you are between jobs rather than ill, the relevant payment is Jobseeker’s Pay-Related Benefit, which replaced Jobseeker’s Benefit for people becoming fully unemployed from 31 March 2025. It pays 60% of previous earnings capped at €450 a week for the first 13 weeks, 55% capped at €375 for the next 13, and 50% capped at €300 for the final 13, with a minimum of €125 a week.

If You Die After Leaving: What the State Pays Your Family

This is where the numbers become stark, and where two schemes changed names and rules in 2025 — so anything you read online written before then is likely to be out of date.

Bereaved Partner’s (Contributory) Pension

What used to be called the Widow’s, Widower’s or Surviving Civil Partner’s (Contributory) Pension was renamed the Bereaved Partner’s (Contributory) Pension in July 2025 and extended to cohabiting couples, following the Supreme Court decision in the O’Meara case and the Social Welfare (Bereaved Partner’s Pension and Miscellaneous Provisions) Act 2025.

A surviving cohabitant can now qualify, having lived together for a continuous period of at least 5 years, or 2 years where there are dependent children. The pension stops if you remarry or start to cohabit.

Paid contributions	Aged under 66	Aged 66 and over
48 or more	€259.50	€299.30
36 – 47	€255.50	€293.50
24 – 35	€252.60	€286.60

There is an additional Child Support Payment, previously called the Increase for a Qualified Child, of €58 a week for a child under 12 and €78 for a child aged 12 or over.

The contribution conditions must be satisfied on one person’s record — yours or your late partner’s — and the two records cannot be combined.

One timing point for cohabitants: there was a special six-month window from 21 July 2025 allowing claims to be backdated to 22 January 2024. That window closed on 21 January 2026. A new claim now carries a maximum of six months’ backdating from the date of application, so there is no reason to delay.

Bereaved Parent Grant

The former Widowed or Surviving Civil Partner Grant was renamed the Bereaved Parent Grant in 2025 and extended to surviving cohabitants. It is a once-off payment of €8,000, at the rate published by the Department of Social Protection in October 2025. It is only payable where there are dependent children, and it requires you to qualify for one of a short list of other payments, including the Bereaved Partner’s (Contributory) Pension.

Put beside the cover you lost

A death in service benefit of four times a €70,000 salary is €280,000, paid as a lump sum, tax-free to a spouse or civil partner. The Bereaved Partner’s (Contributory) Pension at the top rate is €259.50 a week — about €13,500 a year — and only if the contribution conditions are met. They are not comparable, and the gap between them is what personal cover exists to fill.

What Your Old Pension Pays If You Die Before Retirement

Your pension savings do not disappear when you leave, and there is a death benefit attached to them — it is simply a different and usually much smaller thing than death in service benefit.

Under section 30(3) of the Pensions Act 1990, where a member of a defined contribution scheme who is entitled to a preserved benefit dies before that benefit becomes payable, an amount equal to the accumulated value of the appropriate contributions is payable to their personal representative. In plain terms: the fund value is paid, not a multiple of salary.

Someone with a €40,000 preserved pension pot has a €40,000 death benefit from it. The same person, still employed, might have had €280,000 of death in service cover on top. Leaving the job did not reduce the pension; it removed the insurance sitting alongside it.

If you are weighing up what to do with old pensions from previous jobs, that is a separate decision with its own rules — our guide to transferring and consolidating old pensions covers it, and what happens to your pension when you die deals with the death benefit side in more detail.

Your Options: What We Would Suggest, and the Alternatives

Here is our recommendation first, followed by the realistic alternatives with their trade-offs, so you can see the reasoning rather than just the conclusion.

Our recommendation: arrange personal cover before your last day

For most people leaving a job, the right move is to put personal life cover and personal income protection in place while still employed, timed to start as the employer cover ends.

The reasons are practical rather than clever. You are still being paid, so the premium is easier to absorb. You are being underwritten on today’s health rather than on whatever emerges over the next few years. Income protection insurers set the benefit by reference to your earnings, and you have earnings to show. And a personal policy is portable: it follows you through every future job change, so you never have this conversation again.

The trade-off is honest enough — it costs money the employer used to spend for you, and if you walk straight into a new job with an equally good scheme you will have paid for a few months of belt-and-braces. Most people conclude that is a reasonable price for not being uninsured during a career change.

Option 2: exercise the continuation option on the group life scheme

If your scheme has one, this converts group life cover to a personal policy without medical questions, inside a short notice period. It is the clear first choice for anyone whose health has changed since they last applied for cover — a diagnosis, a treatment, a family history that has since come to light.

The trade-offs: it typically covers life cover only, not income protection; the premium is at individual rates for your current age, so it is not automatically cheaper than shopping around; and it may exclude any portion of your benefit that carried a medical loading. If you are in good health, an underwritten policy on the open market may well cost less for the same cover.

Option 3: rely on the new employer’s scheme

If you are moving straight to an employer with a good benefits package, their cover may replace what you lost. This is a genuine option and for some people it is the right one.

The trade-offs are the gaps. Scheme eligibility often waits for the end of probation, which can be six months. Cover levels differ — two times salary is not four times salary. Larger benefits can be subject to a free cover limit, above which medical evidence is required. And you are back in the same position at the next job change. If you take this route, get the scheme booklet on day one and read the eligibility date.

Option 4: rely on mortgage protection alone

Many people believe they already have life cover because they have mortgage protection. It is life cover, but it is designed to do one job: clear the mortgage balance. It reduces as the mortgage reduces, and it typically pays the lender rather than the family.

It leaves nothing for the everyday cost of running a household without your income, and it does nothing at all if you are alive but unable to work. It is a floor, not a plan.

Option 5: do nothing and rely on the State

This is a real option and worth stating fairly. If you have no dependants, no mortgage and enough savings to carry you through a long illness, the case for buying cover is weak, and paying for insurance you do not need is not prudence.

For everyone else, the arithmetic above is the argument against it: Illness Benefit of €254 a week at most, no access to it at all on self-employed Class S contributions, and a Bereaved Partner’s (Contributory) Pension of €259.50 a week that depends on contribution conditions being met.

A Tax Relief Worth Knowing About

There is a relief that is easy to miss and applies to exactly the person reading this article.

Under section 785 of the Taxes Consolidation Act 1997, premiums on a life assurance contract approved by Revenue can qualify for income tax relief, within the age-related percentage limits that apply to pension contributions and the €115,000 earnings cap. This is sometimes sold as pension term insurance.

The catch is that it requires relevant earnings — income from a trade, a profession or a non-pensionable employment. If you are a member of an approved occupational pension scheme for retirement benefits in that employment, the relief is not available against it.

But Revenue’s conditions include the case where “the employee is not included for retirement benefits under an approved occupational pension scheme relating to the employment”. So the relief can be available to the self-employed, to company directors and to employees whose only benefit under an employer’s arrangement is a death in service lump sum. If you are leaving employment to work for yourself, this is worth raising.

The age-related limits are 15% of earnings under 30, 20% from 30 to 39, 25% from 40 to 49, 30% from 50 to 54, 35% from 55 to 59 and 40% from 60, all subject to the €115,000 earnings cap and shared across your pension and section 785 contributions.

A Practical Timeline

As soon as you decide to leave — ideally before you resign. Request your scheme booklet and your last benefit statement. Establish your death in service multiple, whether you have group income protection and what its deferred period is, and whether either policy carries a continuation option.

Four to six weeks before your last day. Get personal cover quoted and, if you are proceeding, get the application underwritten. Underwriting takes time, and more so if a medical report is needed from your doctor. You want the policy issued before the employer cover stops, not after.

Your last day. Confirm in writing the exact date the group cover ceases. That date starts any continuation option clock.

Within the notice period. If you are using a continuation option, give written notice inside the window — 31 days under the Irish Life specimen policy. Do not rely on a phone call.

In your new job. Read the new scheme booklet. Note the eligibility date and the cover level, and decide whether your personal policy should stay as it is or be adjusted.

Five Mistakes We See

1. Assuming the cover moved with you. It did not. Group cover belongs to the employer’s scheme.
2. Waiting until after the last day to look into it. Underwriting takes weeks, and any continuation option window is already running.
3. Treating mortgage protection as life cover. It clears a debt. It does not replace an income.
4. Forgetting income protection entirely. People replace the death benefit and leave the far more likely risk uninsured.
5. Going self-employed without checking Pay Related Social Insurance cover. Class S contributions do not give access to Illness Benefit. The State safety net you assumed was there is not.

Frequently Asked Questions

Does my death in service benefit continue if I am on garden leave?

Usually yes, because you are still employed and still a member of the scheme, but it depends on the scheme rules and the terms of your leaving arrangement. Confirm the cessation date in writing rather than assuming your notice period is covered.

I was made redundant. Is that different?

The cover position is the same — it ends when scheme membership ends. Aviva do mention providing cover for a number of months for a member who has been made redundant, without publishing how many, so it is worth asking. The tax treatment of the redundancy payment itself is a separate subject, covered in our guide to redundancy payments and tax.

Can I just take out life cover later, when I have settled into the new job?

You can, and many people do. The risk is that your health changes in the meantime. Insurers price on your health at the point you apply, and a condition diagnosed in the gap can mean an exclusion, a higher premium or a decline. The cost of moving early is a few months of premium; the cost of moving late can be the cover itself.

Is a continuation option always cheaper than buying cover on the open market?

No. It is priced at the insurer’s ordinary rates for your age, so a healthy non-smoker will often do better shopping around. Its value is that it does not ask about your health — which is precisely why it matters most to people who would struggle to be underwritten.

What happens to my group income protection if I am already on claim when I leave?

A claim in payment is a different question from cover for future claims, and it turns on the policy terms and on the reason the employment ended. Irish Life list “the employment ceases” among the reasons income protection payments can stop. If you are in this position, get the position confirmed in writing by the insurer before you agree an exit.

Does my serious illness cover continue?

Employer-provided serious illness cover ends with scheme membership in the same way. Whether you should replace it, and whether income protection or serious illness cover should come first, is set out in our guide to income protection versus serious illness cover.

I am moving abroad. Does any of this change?

Yes, considerably. Personal policies issued in Ireland have their own rules about residence, and Pay Related Social Insurance entitlements are affected by where you pay contributions. Get specific advice before you go rather than after.

Where to Start

The whole of this article reduces to two questions you can answer this week: what did the employer’s scheme actually cover me for, and what would my household need if I could not work, or was not here. The gap between those two numbers is the thing to insure, and it is almost always smaller and cheaper to fix than people expect.

We are a whole-of-market firm, so we can compare terms across Royal London, New Ireland, Standard Life, Zurich, Aviva and Irish Life and set out which fits your circumstances and why.

Related Reading

• Protection: life, income and illness cover explained
• Death in service benefit in Ireland
• Income protection versus serious illness cover
• Does income protection cover redundancy?
• Redundancy in Ireland: your payment and your pension
• How to transfer and consolidate old pensions
• What happens to your pension when you die

This article is general information for the 2026 tax year and is not personal advice. Tax treatment depends on individual circumstances and may change. Insurance benefits and continuation options vary between schemes and insurers — always check your own scheme booklet and policy conditions. Greenway Financial Advisors Limited. Regulated by the Central Bank of Ireland. Registered No. C168372.