Group Life Claims Process: Frequently Asked Questions
Who are ZEDRA Governance Ltd?
ZEDRA Governance Ltd (ZEDRA) is a professional independent trustee company appointed to manage and administer the benefits payable under Group Life Master Trusts for various insurers and employers.
Why are ZEDRA involved?
ZEDRA’s role as Trustee is to determine who should benefit from the Lump Sum Cover payable under the Trust following the death of an employee who is eligible under an employer sponsored Group Life policy.
What is the standard process and steps?
Investigation process:
- During the investigation process, we seek to establish a full understanding of the personal circumstances of the deceased, and any financial dependency/ interdependency on the deceased at the date of their death;
- ZEDRA start our investigation by issuing correspondence, including a Beneficiary Investigation Form, to the employer. This allows us to confirm that the information received on the claim form is up-to-date and to obtain contact details for any potential beneficiaries. This also provides the employer with the opportunity to provide any further details in respect of the case which they feel the Trustee should be aware of;
- If contact details are available, ZEDRA will also issue an introductory letter and a Beneficiary Investigation Form for completion by the individual who we believe to be acting as Personal Representative in dealing with the deceased’s affairs. We may also contact other family members and any potential beneficiaries that we are made aware of, including those nominated by the deceased in a Beneficiary Nomination/ Expression of Wish We may adapt our approach if the Beneficiary Nomination Form was completed some time ago, as the personal circumstances may have changed;
- Following the return of completed Beneficiary Investigation Forms from all parties, all evidence received will be submitted to the Trustee for review. During this review, the Trustee may decide that additional information is required before a determination is made. If so, the relevant individuals will be contacted to request this. If no further evidence is required, the Trustee will come to a determination;
- Once a determination has been made by the Trustee, the determined beneficiary/ beneficiaries will be contacted with confirmation of the lump sum to be paid to them. In order to comply with UK Anti-Money Laundering Regulations, verification of the identity of all beneficiaries is required before making payment to SmartSearch is used to do this electronically to avoid beneficiaries having to send any original ID documents to us in the post. Beneficiaries are therefore asked to complete a Beneficiary Payment Authorisation Form providing their personal details and the details of the bank account they would like their lump sum to be paid into, to enable us to carry out the necessary checks;
- Once the completed forms have been received and we have carried out the SmartSearch checks on the details provided, a text message will be sent to the beneficiary from SmartSearch asking them to upload a picture of their driving licence or passport so that the identification details provided on the form can be verified;
- Once all the verification checks have been completed, we will make payment of the benefit to the beneficiary’s nominated bank account immediately. If, for any reason, a beneficiary’s identity cannot be verified using SmartSearch, we will contact them to discuss how to proceed and to agree the further information which may be required;
- Funds are expected to clear into the beneficiary’s account within 3-5 working days. Following confirmation that funds have been paid out of the Trustee’s account, both the employer and the insurer (where appropriate) are notified that payment has been made and that the case has been closed;
- Where benefits are paid from a registered trust, details of the amount of the deceased’s Lifetime Allowance used up by the payment of the Death in Service lump sum will be communicated to the deceased’s personal representative for tax reporting purposes, where relevant.
Why do ZEDRA write out to various next of kin? Why do they not just follow the Expression of Wish Form or Will?
Although the Trustee is guided by nominations made by an employee on their Expression of Wish form or Will, these are not binding on the Trustee’s decision. The Employee’s wishes are taken into account during the decision-making process. However, over time personal circumstances can change and an Expression of Wish form or Will may not have been updated to reflect this.
Our investigations are intended to provide us with a clear understanding of the personal circumstances of the deceased at the time of their death. ZEDRA write out to relevant individuals in order to identify those with a close relationship and, in particular, those who are financially dependent or interdependent on the deceased so they can be given due consideration by the Trustee.
Please note that the Trustee is not obliged to establish the identity of ALL potential beneficiaries, or the legal right of a beneficiary to receive a benefit.
If an employer uses a broker, who do ZEDRA contact?
ZEDRA will contact either the employer or broker depending on the instruction received when we are notified of the claim.
What is ZEDRA complaint process?
If an individual wishes to file a complaint this can be put forward in writing to the following address:
ZEDRA Governance Limited
Merlin House
Brunel Road Theale
RG7 4AB
Why are ZEDRA asking for the same information provided to the insurer?
ZEDRA are duty bound to carry out a full and independent investigation into all cases that we process. As such we look to have direct contact with all parties during this process.
It may be that there is a lapse of time from when an employer provides information to the insurer and ZEDRA being informed of the Death in Service claim by the insurer, and/ or the employer may have additional, sensitive information that they wish to share only with the Trustee.
ZEDRA need to ensure that we obtain the most up-to-date information regarding the personal circumstances of the deceased during our investigation. We understand that, in certain cases this may feel like a repetition of information; however, it is much appreciated and ensures that all lines of enquiry are exhausted.
Why are you not simply paying the benefit straight to the next of kin?
Payment of the benefit is at the Trustee’s discretion, and the next of kin may not be the most suitable person to receive the benefit.
ZEDRA ensures a thorough investigation into the personal circumstances of the deceased is conducted prior to payment being made in order to identify the appropriate beneficiary/ ies.
When will payment be made?
Payment will be made to the beneficiary/ beneficiaries as determined by the Trustee immediately following the return of a completed Beneficiary Payment Authorisation form and the completion of satisfactory checks of the beneficiary’s identity. The information required to carry out these checks will be requested from the beneficiary once a determination has been made by the Trustee (as explained in the investigation process above).
Can the employer be kept in the loop?
ZEDRA issue initial correspondence to employers at the outset of the investigation in order to request the return of a completed Beneficiary Investigation Form and to give them the opportunity to provide any further information they feel may be relevant to the claim. Following this, ZEDRA will next contact the employer (or their broker) when payment has been made and the claim has been closed. However, if an employer wishes to contact ZEDRA during the claims process in order to obtain an update on the progress of the investigation, or to submit additional evidence to the Trustee, they are able to do so.
Can ZEDRA tell the employer, broker, or insurer who the beneficiary is?
No. Due to Data Protection Regulations ZEDRA is unable to disclose the identity of beneficiaries to any other party.
Can payments be made into trust?
Yes, payments can be made into trust to be held for beneficiaries, typically children under 18, until they reach a certain age. Trusts may also be considered where the beneficiary is a child or adult incapable of acting by reason of illness, mental disorder or otherwise. In this scenario the trust may run for many years and in some instances the settlement trustees may not be family members. Whether or not a payment is made into trust depends on the particular circumstances of each case and the terms of the trust being proposed. These would need to be sufficiently aligned with the determination the Trustee makes in respect of who the beneficiaries are.
We would strongly recommend early engagement with ZEDRA if a trust route is being considered, as we will have specific requirements and there may be stipulations set out in our Trust Deed and Rules that will need to be adhered to. Any existing trust documentation may need to be amended before the Trustee is able to discharge benefits to it.
The practicalities and costs involved in establishing and operating a trust should be carefully considered. We would highly recommend seeking legal advice and to engage with ZEDRA before proceeding to set up a trust to help assess whether a trust is a suitable and practical option for the beneficiary.
It should be noted that where there is a single beneficiary, e.g. the deceased’s surviving spouse or partner, it is very unlikely that a trust will be deemed necessary and direct payment to the beneficiary will be considered as the preferred course of action. Payment to children under 18 is, under most circumstances, made to the Legal Guardian to be held in informal trust for them.
Can the employer instruct ZEDRA who to make payment to?
No, the employer is not able to instruct ZEDRA who to award the lump sum payment to. As Trustees, ZEDRA are required to conduct a thorough, independent investigation into the personal circumstances of the deceased in order to determine potential beneficiaries and any instances of financial dependency before making a discretionary determination on who the benefit is awarded to.
Can payments be made to or via the employer?
No, ZEDRA are required to conduct an investigation into the personal circumstances of the deceased before any form of payment is awarded. As it is ZEDRA’s role as Trustee to administer and manage this benefit, it cannot be paid out by the employer.
Is the payment free from inheritance tax?
As this is a discretionary payment made directly to beneficiaries, it does not form part of the deceased’s estate and is currently free from inheritance tax.
Where can I find ZEDRA’s Group Life Master Trust Data Protection Policy?
You can view our Data Protection Policy here.
