Economic Abuse Guidance Highlights the Need for Safe Insurance Administration

Economic abuse and life insurance: why policies need to be handled with care

New insurance-industry guidance on economic abuse has reinforced an important point for financial firms: money, insurance, debt and access to financial information can all be used as ways of controlling another person.

The Association of British Insurers (ABI) published new guidance in September 2026 aimed at helping insurance and long-term savings firms identify and respond more safely to economic and domestic abuse.

For life insurers and advisers, that means good customer care cannot stop at ordinary policy administration.

A change of address, request for policy information, missed premium or telephone call to a shared household number can have safeguarding consequences where a customer is experiencing abuse.

The question is not simply whether a policy instruction is technically valid.

Firms also need to consider whether their actions could disclose private information, remove somebody's financial control or create additional risk.

How financial products can become a means of control

Economic abuse can take many forms.

It can include:

• restricting access to money;
• taking control of bank accounts;
• building debts in another person's name;
• monitoring spending;
• controlling household bills;
• preventing somebody from working;
• taking wages or benefits;
• interfering with insurance or pensions; or
• preventing someone from making independent financial decisions.

Digital banking and online financial services can make that control harder to identify.

Shared email accounts, passwords, banking apps, account alerts and devices can potentially reveal what another person is doing.

Insurance can become part of that picture too.

The ABI's guidance notes that insurance itself can be weaponised, including circumstances where someone is trapped in a policy they want to leave or cover they depend upon is cancelled by another person.

For life insurers, that makes apparently routine administration potentially significant.

Joint finances do not automatically mean shared authority

Joint financial arrangements can be particularly complicated.

A customer may share a mortgage, current account, household bills or insurance with a partner while still needing some communications to remain confidential.

A firm should therefore not assume that another person is safe to speak to simply because the couple share financial commitments.

Life insurance illustrates the problem particularly well.

A joint life insurance policy normally covers two people under one policy. Many joint policies pay out once, usually following the first death, after which the policy ends.

But that does not mean both people necessarily have unrestricted authority to make every possible change or receive every piece of information.

Policy ownership, provider terms and the precise structure of the contract matter.

Safe handling may therefore require firms to establish:

• who owns the policy;
• who is insured;
• who is authorised to receive information;
• who can request changes;
• whether communications are being sent somewhere safe; and
• whether another person's involvement could put the customer at risk.

A simple change of address may not be simple

Changing an address would usually be an unremarkable administrative task.

In the context of domestic or economic abuse, it can be extremely sensitive.

Sending a confirmation letter to an old shared address could reveal that somebody has moved.

A telephone call to a household number could reveal that the customer has contacted the insurer.

An automated email or account alert could expose that a policy has been reviewed or changed.

Even asking to speak to both policyholders together could create difficulties if one person is controlling the other.

That is why vulnerability procedures need to include a practical way for customers to establish safe methods of contact.

Depending on the circumstances, that could mean:

• not leaving voicemail messages;
• using a different telephone number;
• using a private email address;
• avoiding postal correspondence;
• agreeing a particular time at which it is safe to call; or
• ensuring another household member is not automatically included in communications.

Life policies need particularly careful handling after separation

Relationship breakdown can expose weaknesses in the way an existing policy was originally arranged.

Someone separating from a partner may discover that they do not control the bank account from which premiums are paid, do not have access to policy documents or do not understand who actually owns the cover.

A joint policy may also be difficult to separate.

Some policies may offer options following separation, while others cannot simply be converted into two independent policies.

Our guide to transferring or changing ownership of life insurance explains why changing the insured person, policy ownership and the person receiving the eventual payout are three different issues.

This distinction becomes especially important when coercion or abuse is involved.

Cancelling an existing joint policy and applying for separate cover may sometimes be appropriate, but it should not be assumed to be the answer.

New life insurance is normally assessed using the applicant's current age and health. If circumstances have changed since the original policy was taken out, replacement cover could cost more or be harder to obtain.

Anyone considering cancellation should therefore understand the consequences before acting. See our guide to cancelling life insurance.

Who controls the life insurance payout?

Another important issue is who would receive the money if a claim were made.

People sometimes assume that life insurance automatically pays a spouse, partner or next of kin.

That is not necessarily the case.

The answer can depend on:

• policy ownership;
• whether the policy is joint or single;
• whether it has been written in trust;
• who the trustees are;
• who the beneficiaries are;
• whether the policy has been assigned;
• the deceased person's estate; and
• their will or, where relevant, intestacy rules.

Our guide to who receives a life insurance payout explains how these arrangements differ.

In an abusive or controlling relationship, understanding those distinctions becomes particularly important.

A person should not assume that simply separating from a partner automatically changes who controls the policy or who might ultimately benefit from it.

Trusts and beneficiaries can be sensitive too

Life insurance is often written in trust so that a payout can be directed towards particular beneficiaries rather than passing through the policyholder's estate.

That can be useful, but a trust is a legal arrangement and should not be treated as an informal beneficiary nomination.

Customers need to understand:

• whether the policy is already in trust;
• what type of trust has been used;
• who the trustees are;
• who can benefit;
• whether beneficiaries can be changed;
• what authority trustees have; and
• whether a proposed change can be reversed.

Our guide to writing life insurance in trust explains the role of trustees and beneficiaries in more detail.

Where separation, coercion, children or complex ownership arrangements are involved, independent legal advice may also be appropriate.

An insurance adviser can explain how a policy works, but should not present a legally significant change to ownership or a trust as a simple piece of administration.

Missed life insurance premiums may need context

Economic abuse can also affect whether premiums continue to be paid.

Someone may appear to have simply missed a Direct Debit when, in reality, another person controls the household bank account.

A policyholder may not even know that payments have stopped.

This matters because persistent missed payments can eventually cause life insurance to lapse.

Where vulnerability has been identified, firms may therefore need to consider the circumstances surrounding payment difficulties rather than viewing them purely as an administrative failure.

Customers considering changing an existing policy can read our guide to increasing or changing life insurance cover, including why it can be important not to cancel existing protection before replacement cover is fully in force.

Support should come before product optimisation

Ordinarily, an adviser might recommend bringing household finances together, reviewing a couple's protection jointly or paying premiums from a shared account.

In an abusive relationship, the same steps could increase another person's control.

The first priority should therefore be allowing the customer to communicate safely and following appropriate vulnerability and safeguarding procedures.

That can mean recognising that the commercially neatest arrangement is not always the safest one.

A customer may need:

• separate communication;
• a private contact number;
• an alternative email address;
• no written correspondence;
• additional identity safeguards; or
• an opportunity to speak without another person being present.

Good advice in this situation is therefore about more than obtaining the right amount of life insurance.

It is also about who controls the policy, who controls the information and whether dealing with the policy could inadvertently place somebody at greater risk.

Insurance firms also need to recognise the limits of their role

Life insurers and advisers are not domestic-abuse services.

They should not attempt to replace specialist support.

What they can do is make sure their own processes do not make an already dangerous situation worse.

An insurance review can establish:

• what cover exists;
• whether the policy is joint or single;
• who owns it;
• how premiums are being paid;
• whether it is in trust;
• who may receive the payout; and
• what changes the insurer allows.

It cannot replace safety planning, legal advice or specialist domestic-abuse support.

Anyone in immediate danger should contact the emergency services.

Confidential specialist help is also available through organisations including Refuge and Surviving Economic Abuse.

Why the new guidance matters

The ABI's new guidance matters because good customer outcomes depend on context.

A change to a life insurance policy can be technically correct while still creating harm if privacy, identity, communication and control have not been considered.

For most customers, changing an address, discussing a policy with a partner or moving a Direct Debit is routine.

For someone experiencing economic abuse, those same actions can reveal information or remove one of the few areas of financial independence they still control.

The challenge for insurers and advisers is therefore not to make assumptions.

It is to make sure customers can understand and control their own protection safely.

Sources: Association of British Insurers, A guide to supporting customers experiencing economic abuse, September 2026; Surviving Economic Abuse; Refuge.