The availability of bereavement benefits is not widely known, with just 14% of UK adults aware of potential £2,000 tax-free lump sums, many miss out, despite meeting eligibility criteria.
Reinsurer RGA, which carried out the research said, while the life assurance industry has speeded up the death claims process, awaiting Grants of Probate or investigating disclosure can mean that it can be some weeks before payment can be made to the beneficiaries.
Individuals who claim under a life assurance policy may also be entitled to bereavement benefits available from the State that could potentially ease some of the financial strain in the early days following bereavement, and beyond.
Simon Grant, claims manager for RGA, said: "The death of a spouse is a life changing event with major emotional, practical and financial consequences. We will continue to work with our clients to advise customers of the existence of these potential benefits as part of the insurance death claim process."
RGA confirmed that 86% are not aware that if someone dies having paid National Insurance contributions, then a spouse may be entitled to receive a one off tax free lump sum payment of £2000'
A similar amount (85%) were unaware a spouse may be entitled to receive a taxable weekly benefit for up to one year from the date of their death, while 83% did not know of the existence of a a taxable weekly benefit for any children, as long as they are also receiving child benefits
Helen Morris, Technical Claims Manager for Aegon UK, an RGA client, added: "These findings underline why we need to build awareness of this issue. Aegon have developed a factsheet outlining these benefits which we send to life policy claimants. Since we launched this last month we have already received positive feedback from advisers."
