Legal & General (L&G) have recently introduced its funeral payment pledge, bringing it in line with multiple other life insurance providers in the marketplace.
The pledge was first floatedin 2016 by the Protection Distributors Group (PDG), which suggested insurers make up to £5,000 available as an immediate, upfront payment to cover funeral costs in the event of a life insurance payout being delayed. L&G has gone beyond the PDG’s suggestion, making up to £10,000 available to cover funeral costs.
This can be a massive help to families facing the spiraling cost of a funeral, especially if they opt for a burial with a full service as this is the most expensive type of send-off you can give your loved one. This can cost anywhere from £4,500 upwards.
The funeral payment pledge kicks in when there’s a delay in paying out the full life insurance death benefit. This might be because of the need to get a grant of probate/representation to deal with the deceased’s affairs, which can tie up the estate for weeks if not months. Meanwhile, cash is needed on hand to cover funeral expenses.
To receive the interim funeral payment from L&G, the life insurance claim must be accepted in principle and evidence received to support the claim. Then, if there’s a delay in receiving the actual death benefit, L&G obtains the funeral invoice and pays the benefit straight to the funeral director to cover the cost of the send off in the meantime.
This saves a grieving family from having to find the cash to cover the funeral at a very difficult time, when they are not only facing the loss of a loved one but also the fact that the life insurance payout has been delayed.
The move by L&G follows a number of other providers, some of which have taken a slightly different approach. Aegon, AIG and Liverpool Victoria, for instance, all also make £10,000 immediately available but there’s a choice about whether the funds are paid to the funeral director or straight to the family, offering additional flexibility. This way, the money can be used to cover probate fees as well or to tide the family over until the bulk of the benefit comes through.
Royal London also offers the advance death benefit, although it goes above and beyond paying for a funeral with the offer of a £25,000 advance payment on completion of a simple form by representatives of the deceased (or up to £100,000 if the deceased has left a will). Zurich, meanwhile, has no limit on the early payments it will make to its clients providing the figure is within the sum assured.
Of course, while the introduction of the funeral payment pledge is welcome, it is really no substitute for setting up the policy with forethought to start with. L&G, like all life insurance providers, allows for the policy to be written into trust.