Nearly three times as many protection policies are being placed in trust now compared to five years ago as advisers increasingly help prevent payouts becoming stuck in probate.
The analysis from mortgage and protection network Stonebridge reveals that the number of life policies written in trust has climbed from 5.3% to 14.3%.
The firm pointed out that life policies can be worth hundreds of thousands of pounds but, unless they are held in trust, the payouts enter probate with the rest of a policyholder’s estate.
It said trusts were particularly useful where immediate access to funds would help a beneficiary avoid hardship or financial difficulty.
Analysis of sales data over the last five years was gathered from one of Stonebridge’s six key providers, which was unnamed.
While the proportion of policies placed in trust cannot always be compared between providers because of demographic and product variables, the trend is the key factor, the firm claimed. Its advisers’ network-wide placed closer to 25% of policies in trust on average.
The findings come after the FCA’s Pure Protection Market Study final report said the regulator wants to encourage greater use of preparatory tools, including trusts and nominated beneficiaries, which allow claims to be paid out more quickly.
The report called foreseeable friction at the claims stage the ‘beneficiary gap’, where funds fail to reach the intended recipients quickly and effectively.
John Scrivens, sales director at Stonebridge, said: “Using trusts protects beneficiaries from the nightmare of vital funds being locked up in probate, which makes them a crucial pillar of the advice brokers should be giving consumers.”
He said all too often, funds were withheld from the bereaved in their time of need because a trust was not considered when the policy was taken out.
He added: “Fortunately, times have changed and advisers are increasingly conscious of the circumstances in which trusts are most appropriate and their benefits.”
• Analysis was based on a survey of a single provider partner’s five-year sales data covering more than 8,000 policies. Year to the end of Q2 2026 vs year to the end of Q2 2021 and Q2 2025.