Navigating bereavement: How the life insurance industry can help
Gemma Perry, Senior Propositions Manager at Aviva, discusses the need for bereavement support within the life insurance industry.
As anyone who has suffered the loss of a loved one knows, the aftermath of death brings a cascade of challenges that stretch far beyond the financial relief our life insurance policies provide. All too often, our customers find themselves overwhelmed by legal complexities such as locating a will and probate, forced to make heart-wrenching decisions like rehoming beloved pets or dividing cherished possessions in a way that maintains family harmony, all whilst grappling with profound emotional turmoil.
While life insurance policies provide crucial financial support, they address only a fraction of the challenges faced by those who are bereaved. Research by Aviva in 2023 revealed that many people underestimate the complexities of end-of-life planning. Despite a strong desire to spare their loved one’s unnecessary heartache, a maze of options and lack of awareness often result in many passing away with little or no plans in place. [1]
During the research, a participant, who recently lost her Dad, recalled having to sift through drawers of paperwork trying to make sense of the many bank accounts, savings, investments, insurances, loans etc. that had built up over decades. Her Mum didn’t have anything to do with the finances so when her Dad died it fell to her to sort everything out and make sure her Mum could access the money she needs. She recalled her stress was off the charts and left her feeling if only they’d made plans whilst he was still here. The life insurance industry is uniquely positioned to play a pivotal role in helping to address the many unmet needs associated with end-of-life planning and deliver even greater value to customers.
Navigating legal challenges during bereavement/incapacity
Managing the deceased's estate, dealing with wills, probate, and other legal matters can be overwhelming and often involves navigating complex legal processes and paperwork.
Wills:?A signed will could be the difference between a straightforward dissemination of an estate versus a complex, emotionally painful, and financially detrimental one. However, a study from May 2024 showed that 66% of UK adults did not have a will in place.[2] Dying intestate (without a will) not only slows down the insurer's ability to pay the claim but could also mean that unmarried partners or stepchildren do not inherit. It would also mean no legal guardian has been appointed for dependent children, a decision that would have to be determined by the courts.
Estate administration and probate:?Proper estate planning and probate services can significantly ease the burden on the bereaved by making sure that the deceased's assets are distributed according to their wishes. This process involves verifying the will, settling debts, and distributing assets under court supervision, which helps protect beneficiaries and creditors. Without probate, the distribution of assets can become chaotic, leading to disputes and delays. Effective estate administration ensures that all financial matters are handled within the confines of the law, reducing stress and potential conflicts for the bereaved during an already challenging time.
Lasting power of attorney (LPA):?not just for the elderly or dying, when a person experiences diminished capacity loved one’s step in to support. However, without a registered LPA in place, they often face significant difficulties managing finances, and paying bills. This can lead to the build-up of debt, unnecessary financial losses, and even legal action. In the absence of a registered LPA, loved ones can apply for a deputyship, but this can take months and cost thousands of pounds in legal fees. The Office of the Public Guardian (OPG) reported that while the number of LPAs registered has been increasing, a significant portion of the population still does not have one in place. In 2023, over 1 million LPAs were registered, but this still leaves many without this important legal document.[3]
It’s the seemingly ‘little’ things that can be the biggest burden
The practical aspects of dealing with the death of a loved one can often be the most worrisome to the bereaved.
Final wishes:?Personal items such as photos, trinkets or just everyday objects may not hold significant monetary value but are rich in sentimental worth and held special meaning to the deceased. Loved ones are left to decide what to do with them. This burden could be offset with a little forward planning. A clear record of ‘final wishes’ allows individuals to specify their preferences for the distribution of cherished items. Providing clear guidance to family members and removing potential conflict.
Funerals:?Giving thought to your funeral (however unsettling that may be) can significantly ease the immediate pressure on those left to organise it. Decisions like burial or cremation, black dress code or cheerful colours, flowers or charity donations, and the song played as one last message to those you love. I’m under strict instructions from my Mum to play ‘I will always love you’, but it must be Dolly’s version not Whitney’s!
Digital safe haven:?Secure digital storage of important documents and account information simplifies the process of managing the deceased's affairs. By having all essential information in one accessible place, loved ones can quickly and efficiently handle financial accounts, legal documents, and personal records such as social media accounts - reducing stress and confusion during an already challenging time. Without easy access to this information loved ones are reliant on corporate goodwill or access policies to try and retrieve digital assets. A process that can take years and is often futile.
Emotional resilience in times of loss
As anyone who has experienced it will tell you, the inevitable grief that follows the death of a loved one can be debilitating, leaving many in a vulnerable state of despair. Of course there’s no insurance policy that can eliminate emotional pain, but there are policies that provide access to professional grief counselling. A route to a vital support system that can help to navigate grief, develop coping mechanisms and build resilience. This support can make a meaningful difference to someone’s emotional recovery.
Signposting bereavement services in financial advising
By addressing these unmet needs, the life insurance industry is not only supporting families during one of the most difficult times in their lives but also raising its profile with the next generation of customers who may also want to put their own affairs in order. This proactive approach not only prepares clients for the inevitable but also enhances the overall advisory experience. Here’s why signposting bereavement services during protection conversations is a strategic move for financial advisers:
Bereavement services are an integral part of the Aviva DigiCare+ app which is offered as a post-sale benefit to customers who purchase an Aviva personal protection policy. The app offers mental health bereavement counselling from Square Health. ?Red Apple Law provide a practical guide to bereavement and access to a free legal helpline and discounted legal services such as wills and livings wills, lasting power of attorney and estate administration.
Aviva DigiCare+ app and services are non-contractual benefits Aviva can change or withdraw at any time. Terms and residency restrictions apply.
Sources
PT25117c 02/2025
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Marketing
1 天前Great article Gemma Perry - thanks for sharing your insights.