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Many of us pay into a pension each month in the hopes that when we reach the golden age of retirement, there is enough saved for us to live off of.  And that can be quite a challenge trying to insure we have put enough into the pension, and that the pension performs well enough so we have the necessary funds to retire off of.

But unfortunately in some instances we don’t reach that mecca of retirement, we die before we get to that point.

So what about our retirement?

In most instances we are allowed to designate a beneficiary for the pension so that if we die before we can claim the pension, it is paid out to who we decide to have it paid out to.  If we have not stated a beneficiary, then the pension can be paid out to our estate.

Many pensions are administered by insurance companies, and as such as regulated by the FSA, and also are in most instances are not just sympathetic and understanding if someone dies and a claim for the pension is placed, but also are usually kind and handle these matters with a sincere sense of empathy.

So I was very surprised when I read a large insurance company held up paying a pension to the estate of one of their deceased clients, and stated to the deceased person’s fiance that the claim was being reviewed and “UK law prohibits us from paying any monies to a person that may have committed a crime from which they may profit”.

This is understandable and standard form in all life insurance and claims involving where a criminal act may have been committed, and the beneficiary may be involved in an investigation for a crime.

But this poor woman’s fiance died in hospital from a nursing error.  The coroner recorded a verdict of accidental death.  Yet, the insurance company who held the pension stated they were asking the police to look into the death as a possible crime.

Serious stuff indeed, and quite unnerving for the fiance left behind.

What appears may have occurred is a letter sent from the insurer was delayed until after the coroner’s inquest, which it should been sent much sooner, prior to the inquest.

And insurance companies can wait until a coroner’s inquest is completed to pay a claim, as they do not know the full situation or facts until this investigation is complete.  There seems to be a crossing of wires in this instance.  One with the letter being sent out, and also the fact a coroner’s report needed to be done to confirm it was an accidental death.

The insurance company has since apologised to those involved and offered a small compensation.

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