Beneficiary nomination FAQs

Your client can name up to 5 individuals to receive any death benefit. Only individuals can be named so they can’t name a company, mortgage lender, charity, or their estate.

Yes, your client can update and change their beneficiaries at any time. We will remind your clients yearly that they can change their beneficiaries.

No, whilst they can change the beneficiary to someone else or write the plan under trust at a later date, they can’t remove all beneficiaries. This is because once the client has decided to nominate a beneficiary it must not be possible for the plan to come back into their estate.

No, beneficiary nomination can only be applied for at the time of application.

No, beneficiary nomination can only be used on single own life plans.

Beneficiary nomination is suitable for clients whose situation is straightforward. For complex estates, for example, blended families, tax planning situations or very young beneficiaries where payment to their parent or legal guardian is wanted, a trust may be more suitable. But we can’t advise a client and each situation is different.

It would provide the same IHT protection in the event of death, however any terminal illness claims would be paid to the cover owner and would form part of the taxable estate on death.

No, the nomination can only be done as part of the initial submission of the application. To add nominated beneficiaries at this stage you’d need to complete a new application.

Where a couple isn’t married it may be beneficial if they each take out their own cover for each other. In this instance, especially if they don’t have wills, either a trust or nominating a beneficiary is essential as neither party is entitled to any of the other’s estate.

Yes. They can apply for any combination of covers on the people covered. As long as each person is the sole owner of their own cover, they can each nominate their own beneficiaries.

Yes, and there's no complicated paperwork to complete to remove or change their nominated beneficiaries.

If there is no trust or nominated beneficiary, the payment of the cover may be delayed while probate is obtained. The payment will then be made to the personal representatives not direct to the lender. It could therefore be several months before the mortgage can be repaid. Writing the plan in trust or nominating a beneficiary means the claim can be paid without probate so cash can be made available to repay the loan much quicker.

No, your client can’t nominate a lender as a beneficiary as this would be seen as meeting their liability and therefore a direct benefit to their estate. For beneficiary nomination to be effective a client must not be able to benefit themselves.

A single plan can’t have both beneficiary nomination and a trust at the same time. If your client is considering a trust for one part, we would suggest all covers should be under trust.

Yes, any benefit that starts to be paid before they die will be paid to them and if they die after it has started to be paid will be paid to the person entitled to their estate. Any benefit that starts to be paid after they die will be paid to the nominated beneficiary.

Yes, they can, and the trust will automatically override any beneficiary nomination.

We will pay the benefit to the minor’s parent or legal guardian who will then be responsible for managing the funds until the minor reaches 18.

The client can nominate another beneficiary but if they haven’t, by the time they die, we pay the next of kin of the last beneficiary to die, using the same rules that apply to English intestacy.