The Intermediary –- May 2026 - Flipbook - Page 22
P RO T E C T I O N
In focus
SHOULDN’T THE SIMP
PRODUCT BE EASIEST
ife is rarely
straightforward, and
the protection industry
oen mirrors this
complexity. Navigating
its intricacies can present
real challenges for clients seeking the
best outcomes.
Additionally, advisers are dealing
with lots of changes, and regulators
are paying closer aention to whether
the distribution of protection products
really helps close the protection gap.
Consumer Duty now asks whether
foreseeable harm is being prevented,
not just if products are suitable.
Meanwhile, the systems that clients
rely on when someone dies, such as
probate, estate administration and
intergenerational planning are facing
more challenges.
While the Financial Conduct
Authority’s (FCA) interim findings
from its pure protection market study
were positive – revealing no glaring
concerns and reinforcing that the
market largely works well for those
who have cover – the majority of
UK adults still don’t hold any form
of pure protection. Many just never
consider their protection needs unless
prompted, and protection remains
very much ‘sold, not bought’.
L
Mind the gap
At the centre of addressing this gap
are advisers, whose expertise and
proactive engagement are pivotal in
guiding individuals to recognise and
act on their protection needs.
However, advisers can only drive
progress so far if conversations
continually stall when complexity
arises. Trusts are a classic example.
They are one of the most powerful
tools we have in protection planning,
but they are also an area where
confidence, understanding and
momentum can easily drop away
for clients, and sometimes for
advisers too.
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The Intermediary | May 2026
Probate times have lengthened
significantly in recent years. Estates
are becoming more complex,
families more blended, and with
pensions increasingly forming part of
Inheritance Tax discussions, my view
is that probate delays are more likely
to increase than disappear.
Trusts still play a critical role
here. When a policy is wrien in
trust, it sits outside the estate, avoids
unnecessary Inheritance Tax exposure
and allows proceeds to be paid without
waiting for probate. For many
clients, particularly where children
are involved or where control and
flexibility are needed, a trust remains
the right answer.
But not every case looks like that.
And not every conversation needs to
start and finish with a trust discussion
to deliver a good outcome.
Case by case
One of the challenges with the way
we sometimes talk about protection
planning is that we present it as
a binary choice: the claim is paid
into the estate or it goes into a
trust. In reality, there is a spectrum
of solutions, and beneficiary
nomination sits on that spectrum
as a proportionate option for
straightforward cases.
When applying for certain life
policies, clients can nominate who
they would want the money to be paid
to on death. As long as the nomination
is valid, benefits can be paid directly
to those individuals without waiting
for probate and without forming
part of the estate for Inheritance Tax
purposes. The client retains control
and can change their nomination if
their circumstances change.
Take Meryl and Glen. They’re an
unmarried couple who have just
bought their first home together. Right
now they can manage the mortgage
and bills with a bit le over, but they
both worry about what would happen
GREGOR SKED
is senior protection technical
manager at Royal London
if one of them died. Aer speaking to
an adviser, they decide to take out life
cover to protect each other.
Each of them takes out a policy on
their own life and names the other
as their nominated beneficiary. That
decision maers – if one of them
were to die without a valid will, the
rules of intestacy would apply, and
of course, cohabitees aren’t included.
By nominating each other, Meryl
and Glen make sure the money goes
where they intend, without delay, and
without the risk of it being tied up in
an estate.
They also know that if they later
get married, have children or change
their plans, updating a beneficiary
nomination is straightforward. Or
they can still swap the policy into
trust. The solution works for where
they are now, without closing the door
on different planning later.
Or consider Sue. She’s concerned
that if illness stopped her working,
she wouldn’t be able to keep on top
of the bills. At the same time, she’d
like to leave something behind to help
her adult children with costs aer
her death. Through an adviser, she
arranges cover under a menu plan,
combining income protection and life
