Proof of title
Proof of title to the life policy will be required before the claim is paid. If payment is being made to trustees or the insured (on a contract on the life of another) then the policy is all that needs be provided.
If the policy has been assigned, then the life office will need to life policy and the deeds of assignment.
If the policy is an own life policy that has not been assigned, then payment will be to the estate of the deceased.
The estate is represented by a legal personal representative who can produce the appointment grant of representation issued by the court that appointed them.
Executors and administrators must produce a grant to prove their title. The life office should resist requests to make the payment before the grant has been issued. An original grant or a court sealed ‘office copy’ are required and photo copies are not sufficient.
There are two types of grant.
- A grant of probate when a valid will naming executors was left,
- A grant of letters of administration where no valid will was left.
Sometimes a claimant will say that the value of the estate is too small and no grant will be applied for. Under these circumstances the life office will be at some risk if they make the payment. They will need to decide based on the facts. A possible answer is to get an indemnity from the person to whom they are making payment. Most life offices will consider this approach for amounts under £5,000.
With a joint life and insured policy the payment would be made to the remaining joint insured. If both were killed in the same accident it will be necessary to know who dies first. This may be clear from the evidence. If the details do not clarify the circumstances, such as in an air crash, then section 184 of the Law of Property Act 1925 provides that,
“In all cases where, after the commencement of this Act, two or more persons have died in circumstances rendering it uncertain which of them survived the other or others, such deaths shall (subject to any order of the Court), for all purposes affecting the title to property, be presumed to have occurred in order of seniority, and accordingly the younger shall be deemed to have survived the elder”
Using the above and taking the example of a joint life policy where the sum insured is paid on the first death of one of the joint insured lives then the older joint life would be assumed to have died first and the payment therefore made to the estate of the younger joint life insured. This view was supported by the case Hickman v Peacey where two brothers were killed when a bomb struck the house they were in. The courts decide the amounts should be paid to the younger of the two brothers.