Many people in the UK never review the beneficiaries of their financial policies, which means they could end up leaving money to the wrong people.
As relationships and lifestyles evolve, and family structures become more complicated, it's important to update your insurance and pension policies.
But according to new research by life and pensions company Phoenix Group, high numbers of policy holders have failed to review the recipients of their life insurance policy (62%), critical illness cover (60%), personal pension (65%), income protection (61%) and redundancy cover (65%) since they were set up.
What's more, over half (54%) of the 2,003 UK adults surveyed did not know that their pension typically goes to the person who is named in their pension policy, not their will.
Phoenix Life customer director David Woollett said: "Few people probably know that pensions don't form part of the estate on death, which means unlike savings, property and investments, pensions aren't covered by wills.
"Therefore, it's incredibly important that you check all your financial policies regularly to assure your money will go to the people you want, if a claim is made."
Highlighting the need for families to talk about their financial arrangements, the research found that 51% of people do not know about the policies their mother holds, 56% don't know about their father's and 73% don't have information about their siblings'. Almost one in five UK adults (17%) has benefited financially from a policy they didn't know existed.
Woollett explained that people are likely to take out a number of different policies over their lifetimes -- such as pension, life insurance and critical illness -- and the beneficiaries should be updated as circumstances change.
Policy holders should also inform their recipients about the policy, otherwise they won't know to make a claim, he added.
Copyright © M2 Bespoke 2019