"Time and time again, we hear about abusers weaponising life insurance policies to control and coerce victim-survivors, trapping them in fear for their lives. "
- Sam Smethers, interim CEO of Surviving Economic Abuse
The Personal Finance Society (PFS) has published a new Good Practice Guide for advisers about economic abuse and life insurance.
The Guide aims to provide a starting point for advisers who are looking to refresh their knowledge and understanding of how to support clients who may be experiencing abuse. It looks at how firms and advisers can use their expertise in finance to close opportunities for abusers to exploit financial products. Data suggests one in seven women in the UK have experienced some form of economic abuse from a current or former partner within the past 12 months, according to research by the charity Surviving Economic Abuse (SEA).
SEA noted that life insurance products can be very difficult to separate without both parties’ consent, and this can be a tool to control a victim-survivor post separation. Writing life insurance policies in trust also offers its own challenges, and the PFS Guide explores how to best set up a trust to make it less likely to be used as a tool to abuse. It also offers a list of recommendations for advisers, including working closely with providers of life insurance to promote the interests of victim-survivors. Raising awareness and creating an environment where victim-survivors know they can share information comfortably are both key actions advisers can take.
Carla Brown, president of the Personal Finance Society Board, said: “The aim of this Good Practice Guide is to provide a starting point for advisers either looking to refresh their knowledge of economic abuse or to explore further how they can support clients experiencing economic abuse. The financial services industry has a crucial role to play in this and whilst we understand how to use financial tools to get the best for our clients, we should also be able to identify and avoid policies or products which perpetrators might use to facilitate economic abuse.”
Sam Smethers, interim CEO of Surviving Economic Abuse, commented: “Domestic abusers use every tool at their disposal, including insurance products, to cause devastating economic harm to victim-survivors, often undisrupted and without consequence. Time and time again, we hear about abusers weaponising life insurance policies to control and coerce victim-survivors, trapping them in fear for their lives. Tragically, there are cases where abusers who are policy beneficiaries have been incentivised to kill. Financial services play a vital role in supporting customers experiencing economic abuse. This new guidance will help insurance advisers close down opportunities for abusers to cause harm and help victim-survivors access economic freedom and safety. We look forward to working with the industry to transform its response to economic abuse and hope it will join us in calling for the changes in the law needed to stop abusers in their tracks.”
Separate research from SEA found that one in eight UK women who held a joint mortgage in the last two years experienced joint mortgage economic abuse from a current or former partner – equivalent to over 750,000 people.
