Improved Life Insurance Payout Speed A Welcome Move

There is a very definite reason why people purchase life insurance. It is not a light-hearted decision to make when we acknowledge our own vulnerability in that we will not live forever. Life insurance cover is purchased to make sure that if something untoward happens to us, the people closest to us who depend on us, are not left in the lurch needing money and hurting in more ways than one.

The fact that life insurance policies have taken up to four months to pay out previously is not really morally in keeping with how we believe this type of insurance should be. It is supposed to protect those nearest and dearest to us from the fall-out caused by an early demise, which is bad enough in itself, at a time when it is needed most.

Life Insurance Payout within Four Weeks

The life insurance industry has now improved pay-out speeds, and payments will be made within four weeks according to new guidelines. These guidelines were published very recently by the insurance industry in consultation with the Law Commission.

There is a tsunami of red tape which beneficiaries and dependents are normally expected to wade through when claiming on life insurance policies. They will now be able to cut through these issues and all they have to do is sign a declaration. The declaration is a legally binding document which ensures dependents listed on life policies agree to pay back monies they may not rightfully receive.

Every year in the UK, 32,000 bereaved families are compelled to claim against life insurance policies. Traditionally, pay-outs on claims are held up by probate law until all the beneficiaries have been identified according to the law.

New ABI Guidelines

Under a recent change to the ABI’s guidelines, all named beneficiaries now have the right to claim the cash owed to them within one-tenth of the time.

The Association of British Insurers (ABI) has worked closely with the Law Commission to come up with a plausible solution. Families and dependents have traditionally had to endure hardship until such time as the lengthy legal process for a claim was, well, processed.

What we find very strange is the fact that the industry has only NOW realised that a solution needed to be sought. Certainly financial hardship on the death of a breadwinner is definitely not a new thing; in particular for lower income families.

Having to cope with bereavement is already a very difficult enough tragedy to deal with, without the additional stress of having to worry about where money for day-to-day and other expenses will come from. The new process should change all of this and alleviate some of the hardships endured by bereaved families in the past.

Scottish Widows, Aviva and Legal & General are the three major insurance firms to have already piloted this process successfully.

I've had a very good experience. Sophie kept me up to date and was very helpful. I am really pleased with the product I received and the whole process was much easier than if I had attempted to do it myself.

Katherine Collins
Compare Top 10 UK Insurers
Takes approx. 60 seconds
  • £

Or call us on 0208 432 7333

Compare Top UK Insurer Quotes Logos
Contact Us
Head Office & Pensions and Investments
Millennium Bridge House
2 Lambeth Hill
Personal Insurance & Accounts Payable
Telecom House
125-135 Preston Road
Drewberry London Office MapDrewberry Brighton Office Map
Our Core Principles
  • 1You Come FirstWe are a client focused business who always aim to put you first.
  • 2We are ExpertsTo provide you with the best advice, we need to know our stuff!
  • 3We are HumanWe are real people with feelings who are here to help you.
  • 4We are ProfessionalProviding a 5-star service requires a professional approach to everything we do.
  • 5We are here to EducateWe don't believe in sales, we are here to educate so you can make informed decisions.
Finalist - Moneyfacts AwardsFinalist - Cover Excellence AwardsHighly Commended - Protection Review Awards
Proud member of AMII (Association of Medical Insurers & Intermediaries)Proud member of Money Advice ServiceProud member of UnbiasedProud member of BIBA (British Insurance Brokers' Association)
Cookie Use

Drewberry™ uses cookies to offer you the best experience online. By continuing to use our website you agree to the use of cookies. If you would like to know more about cookies and how to manage them please view our privacycookie policy.