Did you know that 77% of life insurance policyholders didn’t specify who they wanted their payout to go to in 2023?1 This can mean the benefit is given out according to UK laws, which may not be in line with the policyholder’s wishes and the administration process can be tricky, especially when family situations are complicated.
With our Real Life policy there are two ways for your clients with single or dual life policies to make their preferences known to ensure their benefit goes to the right people – by nominating beneficiaries or putting the policy into trust.
Why choose Beneficiary Nomination?
Beneficiary Nomination allows your client to choose an individual, or individuals, to receive the benefit amount in the event of their death. This ensures the benefit goes directly to who your client intends without a legal administration process.
- Flexibility and control – the policyholder remains in full control of their policy and has the flexibility to change or remove beneficiaries without the need for consent from a third party. Changes can be made at any time by simply calling us.
- Protects unmarried couples – by nominating their partner as a beneficiary, unmarried couples who live together can ensure that life insurance benefits go directly to their partner, providing immediate financial support.
Why choose a trust?
Putting a policy into trust adds more control over where the benefit goes when paid. Your client will nominate trustees and beneficiaries and can specify how and when the benefit is given to the beneficiaries.
- Complex estates – where the primary purpose of life insurance is inheritance tax planning, placing this in trust can help when it comes to probate and making estate planning more efficient and secure. It can also include clients who have young children with no guardianship arrangement in place.
- Terminal illness claims – clients can select for the terminal illness benefit to be paid to the trustees should they need to claim for that reason.
How to nominate beneficiaries or set up a trust
As you complete a life insurance application, you’ll have the opportunity to nominate beneficiaries or set up a trust at any time during underwriting or before you select a start date for the cover.
If your client chooses to nominate beneficiaries, you can add them at this stage. You’ll just need the names and dates of birth along with the relationship to the policyholder, as well as the percentage of the benefit each beneficiary should receive.
If your client chooses to set up a trust, you’ll be asked to specify whether it’s a trust with us, The Exeter, or a third-party trust.
For our trusts, you can set up an online trust easily as you complete the application. This automatically includes the policyholder as a trustee. You can then add additional trustees and beneficiaries, either individuals or businesses. Then you can download a draft trust declaration to share with your clients to confirm accuracy.
To add trustees you’ll need their:
- Name
- Date of birth
- Email address
- Phone number
- Address
The trust documentation is included in the policy pack when the policy begins and all trustees are emailed to confirm they’ve been added as a trustee and will receive information about what this means for them.
You still have the option to submit a paper trust, just download the trust forms and guidance notes.
Third-party trusts must be uploaded to the system in PDF format. You can add detail about the trustees but this isn’t required.
If you need help setting up Beneficiary Nomination or a trust during the application, please get in touch with your dedicated new business contact.
Source - Swiss Re - Life Claims (balance of risk) 11.24 1.pdf