Reinsurer RGA says that individuals claiming under a life assurance policy may also be entitled to bereavement benefits available from the state, easing some of the initial financial strain. But the general public, financial advisers and even insurance companies themselves have little knowledge about the benefit.
Simon Grant, UK claims manager at RGA, said: “We are concerned that these benefits are often overlooked by both consumers and advisers. If your husband, wife or civil partner has died you may be able to get bereavement payment, a one-off lump-sum payment of £2,000 that’s tax-free.
“There are certain age limits and eligibility criteria but these benefits are not means tested and the state claim to be able to make payments promptly to those who are entitled.”
Peter Chadborn, IFA at Plan Money, said: “It is quite possible that only those who have personal experience or have assisted clients specifically in this area are aware of the benefits available.
“However with a £2,000 lump sum plus an income potentially available, everyone who loses a spouse should check if they qualify.”
Matt Rann, head of underwriting and claims for Aegon UK, said: “We are keen to ensure our customers receive all the help they need at such difficult times.
“We will shortly be issuing a guide with all new death claims helping our policyholders understand the financial support that is out there for them from the state and how to go about claiming it.”
Grant added: “We intend to carry out further research in the near future and will report the results accordingly.
“In the meantime we encourage financial advisers to check the information available online from the DWP.”
The Department for Work and Pensions is currently consulting on bereavement benefit. It’s paper, “Bereavement Benefit for the 21st century”, closes on 5 March 2012.
