We’re looking at the gap between who a life cover payout is meant for, and who it can end up going to – often called the beneficiary gap.
Visit adviser.guardian1821.co.uk/webinars for the webinar recording and the details of future webinars.
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| Welcome back to our regular email series. |
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| This month, we’re looking at the gap between who a life cover payout is meant for, and who it can end up going to – often called the beneficiary gap. |
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| Only 23% |
of single own life term policies are written
into trust across the industry*. |
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| Why’s that a problem? |
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| When taking out life cover, your clients want their loved ones to receive a payout if they die. Simple, right? The UK’s intestacy rules dictate the ranking order of beneficiaries to your clients’ estate. These rules are used for people who don’t take out a will, but over half of UK adults over age 18 don’t have one**. You need to make sure those loved ones are top of the list from a legal perspective. It’s even more important if the client is part of an unmarried cohabiting couple as their ‘next of kin’ won’t automatically be their partner. |
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| What can you do? |
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| There are 2 ways to make sure beneficiaries are clearly identified, and each has different benefits. It’s important to choose one of them when you’re putting single or dual life cover in place for your clients. |
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| 1. Beneficiary nomination |
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| Beneficiary nomination is the fastest and easiest way to close the beneficiary gap in simple cases. At Guardian, we call it Payout Planner. It directs the money to the nominated beneficiaries, which means the life cover can bypass probate and avoid delays. It’s also simple to nominate beneficiaries during the application. |
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| 70% |
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| of all our life policies that went in force in 2024 used Payout Planner***. |
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| 56% |
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| of life claims paid in 2024 were paid using Payout Planner***. |
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| 4 months |
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| was saved at claim on average by using Payout Planner in 2024***. |
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| 2. Trust |
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| A trust may be more suitable if your clients have more complex needs. If they’re focused on inheritance tax mitigation, or they want to protect the life payout for their children until they’re adults, a trust will give them a more comprehensive solution. You can write any Guardian policy into trust, and it’ll supersede Payout Planner when it’s set up. |
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Sources:
*Swiss Re, Life claims: a balance of risk, November 2024.
**Money and Pensions Service, Over half of UK adults don’t have a will – what to do if your loved one dies without one, January 2025.
***Guardian claims with a decision made from 1 January 2024 to 31 December 2024. |
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| Join our ‘Closing the beneficiary gap’ webinar |
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| With Vincent O’Connor, Head of Strategic Partnerships and Robert Bennett, Senior Business Development Manager |
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| Join Vincent and Robert at 2pm on Thursday 19 June to learn more about the beneficiary gap and how to make sure your clients’ policies are not at risk of falling into it. Click the button below to register. |
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| Bridging the beneficiary gap |
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With Vincent O’Connor,
Head of Strategic Partnerships |
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| Taking action to bridge the beneficiary gap is an industry-wide responsibility. We all need to do what we can to stop money being held up in probate, or worse, not reaching the intended person. Read Vincent’s article to find out why that’s important. |
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| Tip of the month |
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| Ruth Gilbert, Head of Insuring Change |
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| Each month we bring you views from industry experts and advisers. This month, Ruth Gilbert shares the background to beneficiary nomination: |
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| “Beneficiary nomination was first introduced in 2018 as a simple way to help close the beneficiary gap. Up until that point, too many protection clients’ loved ones were receiving nasty surprises at claim – due to probate delays or intestacy rules – because their policy wasn’t written into trust. They weren’t getting a good outcome. Beneficiary nomination was designed as a simple alternative to a trust for clients without complex needs – giving advisers an option that’s easy to put in place with some similar top-line benefits for their clients.” |
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| That’s all for June. We hope it was useful and gave you more details about how to put in place a trust or beneficiary nomination for your clients. |
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| If you have any questions, please give us a call or send us an email. |
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| Kind regards |
| Your Guardian Team |
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Guardian Financial Services Limited is an appointed representative of Scottish Friendly
Assurance Society Limited. All products are provided by Scottish Friendly.
© 2025 Guardian Financial Services Limited
Guardian Financial Services Limited is an appointed representative of Scottish Friendly Assurance Society Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered office: Galbraith House, 16 Blythswood Square, Glasgow G2 4HJ. Registration number 110002. Guardian Financial Services Limited is registered in England and Wales under number 11115769. Registered office: 11 Strand, London WC2N 5HR. |
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