Feature allows customers to nominate who will receive their payout if there’s a claim paid after they die
Royal London yesterday introduced a signature-free beneficiary nomination to its individual life cover and life or critical Illness cover on its Personal Menu Plans.
Royal London said beneficiary nomination provides a simpler alternative to using a trust, which will help prevent probate delays. If a customer's situation is straightforward and they know who they currently want to benefit, they should consider beneficiary nomination.
Royal London will automatically pay any benefit after the customer dies to their nominated beneficiary. The customer can nominate a beneficiary as part of their application.
Customers can change their nomination at any time and there's no need for probate or the completion of a trust form.
For more complicated payout requirements, customers should still consider completing a trust form, said Royal London.
Ian Smart, product architecht at Royal London, said: "We want to give customers peace of mind that their payout will go to the right person at their moment of truth. Currently the only way customers can choose their beneficiary is to complete a trust form, but this can be complex. Beneficiary nomination offers a simpler alternative to make sure the plan holder's money goes where it should."
'Breakthrough'
Tom Baigrie, CEO at LifeSearch, said: "A major and long-established life office offering beneficiary nomination feels like a breakthrough moment to me. The vast majority of protection buying customers don't want to go through the complexities of arranging trusts and will welcome this straightforward and flexible alternative. For the conscientious intermediary it offers a much simpler way of doing the right thing. We all still need to take care of each client's individual circumstances, rather than default to easy, but this will be right for almost all and it is great to have easy more widely available!"
Ruth Gilbert, Insuring Change, said: "Now single own life policies are recognised as the most flexible and best value for money, it's essential we don't lose sight of who the life cover is for and how to get it to them.
"2020 has made it harder to get policies set up right, whilst increasing the proportion of couples who can't just inherit via intestacy - now beyond one in four of couples under 65.
"So I'm delighted Royal London has come out at this time with this much simpler way to ensure bereaved partners don't find they've lost the insurance proceeds they expected as well as their partner."
Katya Maclean, CEO of Guardian, the insurer who introduced its Payout Planner approach to beneficiary nomination when it launched in 2018, said: "We're delighted that others are following our lead and looking into ways to overcome the challenge of delays caused by probate. As a challenger brand, we've been committed since our launch in 2018 to improving client outcomes. Nominating beneficiaries helps us make a fast payout directly to the right people. We've seen encouraging take-up of our Payout Planner so far at Guardian by policyholders, and have seen it help at the point of claim."
