VR pays death benefits upon the death of a member in good standing. Benefit amounts are subject to family size and whether the person was still in the labour market.
Beneficiaries of death benefits
- Surviving spouse.
- Children of the deceased (custodians of children under the age of 18 years) or the one who fully supports the children.
- Other legal heirs if they carry the funeral costs.
Death benefits
VR pays death benefits upon the death of a member in good standing. Benefit amounts depend on family size and whether the respective individual was still in the labour market.
- Upon the death of a member in good standing, the amount of ISK 500.000 is paid to the spouse if he/she was married or to the individual who is confirmed as the one who pays for the funeral if he/she was not married.
- If the deceased leaves a child (adopted or foster child) younger than 18 years of age, the amount of ISK 800.000 is paid for each child, to each child or according to the executive committee’s decision each time to the one who supports a child.
- In addition, the equivalent amount of the respective individual’s credit balance in the VR Contingency Fund is paid.
It is permissible to pay death benefits due to those who have retired from work at the age of 60 years or later, if they have been a member in good standing for 5 consecutive years prior to retiring:
Death benefits for older members as defined in Article 3 of the VR Act are as follows:
Months since the member became an older member:
1-12 months ISK. 712.000
13-24 months ISK. 569.600
25-36 months ISK. 498.400
37-48 months ISK 427.200
49-60 months ISK 356.000
60 months or more ISK 350.000
Example of death benefits
| VR member in good standing | ISK 712.000 | ||
| Member with one child | ISK 1.512.000 | ||
| Member with three children | ISK 3.112.000 | ||
| Member with five children | ISK 4.712.000 |
Modified regulations with regards to death benefits became effective on 12 December, 2023.
Death benefits due to death of members’ children
The Sick Pay Fund also pays benefits due to the death of members’ children under the age of 18 years, 712.000 kr.
Note that benefits are not paid if benefits are received from elsewhere due to statutory reliability insurance.