Insurers must pay life insurance claims in four weeks following the ABI's decision to slash its guidance time for the process.
It has reduced the allowed time from four months after working with the Law Commission to get around the prolonged legal process by introducing declaration for the main beneficiary.
Aviva has welcomed the new guidelines and urged the market to go even further.
The spectre of reducing death claims payment times was raised by reinsurer Munich Re at the Protection Review last summer and discussed further in the December issue of COVER.
Under the new process, when a claim is received the life insurer will ask the main beneficiary to complete a declaration where they agree to pay back any money received from the policy if the legal process decides they were not the rightful recipient.
Otto Thoresen, director general of the ABI, explained: "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," he added.
Robert Morrison, chief underwriter for Aviva, explained the provider has already been addressing the problem and hoped the industry would follow suit to reduce times further.
He said: "It is great news for customers that the ABI has now created guidance on speeding up life claims processes across the industry.
"The current industry average for a death claim to be processed is 73 days and there is a general misconception that it is the insurer that causes this delay. However the biggest part of that delay is often due to waiting for the Grant of Probate - or Scottish equivalent - to be obtained.
"The new guidance - in which we have been heavily involved - will provide some consistency across the market so that whichever insurer a customer chooses, the process for a death claim will be quicker and simpler at the time they need it most.
"However, we would urge the industry to go even further to look for additional ways to speed up the life claims process," he added.
