Group life assurance scheme trustees have full discretion over how a scheme’s lump sum benefits are distributed. The trustees’ decision can be made much simpler if members complete a nomination form, identifying the preferred beneficiaries and distribution basis. Although the trustees have ultimate discretion, they would use the completed nomination form along with any information gained from their own investigations to make an informed decision regarding the payment of benefits.
Without a completed nomination form, not only will the decision on settling any benefits be made more difficult for the trustees, but the employee loses a valuable opportunity to express how they would like the benefits to be distributed. In addition to this, the increased level of investigations that may be required into the member’s personal circumstances in the absence of a nomination form may cause a delay in the settlement of benefits. This delay could have consequences for the dependants who may have to cover mortgage payments and other expenses on top of dealing with the bereavement itself.
It is therefore recommended that scheme trustees provide members with access to nomination forms, which could be made available to the member upon joining the scheme, issued with annual benefit statements and/or placed on the Company’s intranet for the member to update if their personal circumstances were to change.
If you have any concerns regarding your own policy(ies) or would like a nomination form to be designed for distribution to your scheme members, then please get in contact and we will be happy to assist you.
Ryan Davies
ryan.davies@quantumadvisory.co.uk
