People will get life insurance payments more quickly after bereavement, as the ABI issues new guidance to insurers cutting the time it takes from four months to just four weeks.
Over 32,000 life insurance claims are made by families who have lost a loved one every year in the UK, many of which will now be able to benefit from this change.
The insurance industry recognised that financial hardship can arise due to the lengthy legal process associated with winding up a deceased person’s estate. Working with the Law Commission, the ABI found a solution to get around the legal process to ensure a beneficiary can access a life insurance payout quickly and therefore avoid any unnecessary financial stress.
The new process is simple. The life insurer will ask the main beneficiary to complete a declaration where they agree to pay back any money they receive from the policy if the legal process decides they were not the rightful recipient.
Otto Thoresen, the ABI’s Director General, said:
“Dealing with bereavement is hard enough, without the added stress of worrying about money. This new life insurance claims process means the time it takes on average to receive a payout will drop from four months to just four weeks. We believe that this will go some way to alleviating financial hardship for a deceased person’s dependents, especially families on lower incomes who have few other assets available to rely on.”
Source : ABI