The types and costs of Missing Beneficiary Indemnity Insurance

Missing Beneficiary Indemnity Insurance protects Personal Representatives and known beneficiaries should a missing or otherwise unknown beneficiary come forward after the estate has been distributed. Once a policy has been underwritten, it allows the estate to be distributed as if the missing beneficiary has predeceased, providing your clients with peace of mind that the rest of the beneficiaries can receive their inheritance efficiently.

The types and costs of Missing Beneficiary Indemnity Insurance

There are two types of insurance policies to consider: known risk and comfort cover.

Known risk

This policy does exactly what the name suggests and covers a known beneficiary that can’t be traced. This type of cover is more commonly used on testate estates, such as those where a beneficiary has been named in a Will and all efforts to trace the individual have been unsuccessful. However, known risk policies can also be used on intestate estates. For example, if there’s a particular line of the family that has been discovered through research, but all attempts to trace them have failed.

Comfort cover

This type of cover is obtained when all beneficiaries are believed to have been traced, reassuring your clients that they are fully protected if someone unprecedented comes forward later down the line. Comfort cover is usually acquired in intestacy cases when a family tree has been constructed, beneficiaries have been located, and searches prove that no one else exists.

It’s important to note that comfort cover isn’t obtained simply because the research carried out by a genealogist isn’t good enough. As some people can’t be identified through genealogy, such as illegitimate children, it helps mitigate risk against future claims and provides the peace of mind that your clients are looking for.

Comfort policies can also be used to protect Executors when a Testator has made a class gift. For example, research can be used to verify the extent of children or grandchildren, and then insurance can be obtained to protect against any potentially unknown individuals presenting themselves in the future.

Cost of Missing Beneficiary Insurance

As every policy is normally underwritten individually, insurers will assess the risk and provide a one-off premium that is typically payable by the estate. There is less risk involved with comfort policies, so these tend to cost less than known risk policies.

The case of Evans v Westcombe (1999) ruled that Missing Beneficiary Indemnity Insurance is a legitimate expense to be incurred by the Executor and can therefore be taken from the residue along with the legal professional’s fee for administering the estate.

Insurers’ normal requirements

The full details of the situation and the missing beneficiary/beneficiaries. Insurers will want to know why your clients need insurance, who is missing, the relationship to the Deceased, and any other important information to understand the risk involved.
The limit of indemnity. This is an important requirement, as insurers will want to know how much the missing person is due to receive. Whilst this does not need to be precise, it will make a difference to the premium and how the policy is underwritten.
Copies of the Will (if applicable) and Grant of Representation. These important documents are required by insurers to retrieve information such as the Personal Representative’s identity.
Details of any advertisements that may have been placed, such as S27 notices. This will not cause a problem for insurance, but they will want to know if/when these occurred. Insurers also prefer to leave four or five weeks before proceeding with known risk policies (if the notice was recently placed) to give people time to get in touch. We advise that advertisements asking for a missing beneficiary to come forward are not placed in local papers without an insurer's agreement. To do so could greatly increase the risk profile.
A full report from a genealogist “with whose work they are familiar”. We regularly have clients get in contact with us to ask for insurance off the back of research conducted by amateur genealogists. Unfortunately, this is rarely possible, as their research often isn’t as thorough as required. Insurers require detailed reports with specific information about the searches conducted. A simple “person X couldn’t be located despite our best efforts” isn’t sufficient to get insurance. At Title Research, our research methodologies have been developed over 50 years and are accepted by specialist insurers who are confident in our processes.

What to do if you think you may need insurance

Ask your intended genealogist the following questions:

Are your reports designed to obtain insurance? Surprisingly, there are many companies in the market whose reports will not be accepted. Therefore, this is a critical question to ask if you think insurance may be needed.
Are you regulated by the Financial Conduct Authority (FCA) to arrange insurance? If the answer is no, they technically can’t act as the middle person to get the insurance in place. If yes, they should be able to provide an FCA number.
Do you charge an additional fee to write an insurance report, or to arrange insurance? We aim to support you in closing your file and throughout the entire process, therefore, everything we provide is included in our original fee. We don’t charge to write, arrange, or for our time taken to arrange a policy when we have carried out the genealogical research.

How Title Research verifies the family for insurance on intestacy

We conduct our research with insurance in mind from the outset. If your clients do eventually take up a policy, you can be sure that all the requirements will be met. As a rule, Title Research will:

Validate all births, deaths, marriages, and adoptions by obtaining copies of certificates.
Differentiate between whole-blood and half-blood. There is a big distinction if dealing with English and Welsh estates, as whole and half-blood relatives are different classes of kin, and insurers will want this information to ensure they are insuring the family correctly.
Go by facts and not assumptions. Sometimes individuals are unaware of the full details and inadvertently provide incorrect information; we ensure all of our work is backed up.
Conduct searches of the birth, marriage, and death indices to prove that there was no marriage or issue.
Conduct interviews to verify findings with surviving family members. We like to talk to as many people as we can to ensure no one has been missed in our standard searches.

As well as obtaining Missing Beneficiary Insurance, we can help with our wide range of genealogical research services. This includes Tracing Missing People, Reconstructing Family Trees, Verifying Family Trees, Administrator Searches, and more. Our reports and family trees are made with insurance in mind, meaning that we can obtain policies on your behalf and ensure that you and your clients are protected from future claims against the estate. This means that you can complete complex estate administration cases as efficiently as possible.

Title Research is an expert in genealogical research with an excellent success rate for locating missing beneficiaries and tracing thousands of missing people every year. If you would like to discuss how Title Research can help you obtain Missing Beneficiary Indemnity Insurance, call our Client Services Team on 0345 87 27 600 or fill in the form below.

Topics: Genealogical research, Missing Beneficiaries, Missing Beneficiary Insurance