Guardian reports high uptake of beneficiary nomination tool, Payout Planner

Guardian has announced significant engagement with its beneficiary nomination feature, Payout Planner, introduced in 2018. By the end of 2023, 68% of its life insurance policies had implemented Payout Planner, and 74% of its life insurance claims paid during 2023 utilised the tool.

This is in contrast to the industry-wide use of trusts for policy nominations, which, as reported by Swiss Re in October 2023, stood at only 17% for new term policies in 2022, highlighting a notable ‘beneficiary gap’.

Beneficiary nominations are essential for ensuring that life insurance payouts are directed to the intended recipients, such as unmarried partners, thereby avoiding probate. This is increasingly important given that probate can significantly delay access to funds. The UK Parliament Justice Committee noted in November 2023 that probate could take up to 11 months, emphasizing the value of solutions like Payout Planner.

Phil Deacon, head of claims at Guardian, said: “Now with five years of claims behind us, we’ve many examples that show our beneficiary nomination tool, Payout Planner, plays an important role in improving outcomes.

“We’ve experienced first-hand how it has helped us pay the money to the right person in claims where the couple were not married and there was no will in place. We’ve also seen how probate can hold up a payout.

“On average for those claims where the policy was not in Payout Planner or a trust, we’ve had to wait seven months between asking the claimant for the grant of probate and receiving it. Put simply, Payout Planner allows us to bypass this delay which removes an unnecessary cause of potential anguish for a policyholder’s family.”

Ruth Gilbert from Insuring Change highlighted the tool’s advantages: “It’s really encouraging to see a high rate of take-up within Guardian of its beneficiary nomination. Because it forms part of the application process it’s easier to put in place than a trust, and it really makes sense as the default option when available to ensure the money gets to the right people.

“For clients with more complex cases or where IHT planning is the priority, a trust remains the best option, but for the vast majority beneficiary nomination is the simplest option to achieve the desired outcome. We hope to see more providers put this in place to catch the many life insurance claim payouts that would otherwise be directed to probate.”