A Matter of Life Assurance and Death Benefits – Assisted Dying and what it means for the world of Pensions and Life Assurance
A new watershed in British social policy was reached on 29 November 2024 when the House of Commons voted to approve the Terminally Ill Adults (End of Life) Bill by 330 votes to 275 at its second reading. If approved by Parliament, it would allow terminally ill adults with mental capacity in England and Wales to end their own life with approval of the High Court. Similar policies already exist in some European countries as well as some states of the US and Australia. An analogous bill is being proposed in the Scottish Parliament, although the Scottish Government has taken the view that assisted dying is a reserved matter to Westminster.
This article will examine the potential consequences which assisted dying could have for pensions and life assurance. We will not analyse the broad features of the bill, nor will we pass judgement on the wisdom of changing the law, as this has already been passionately debated in Parliament and the nation.
The Role of the Trustee
Whether a death is natural or accidental, an individual with existing defined contribution pension savings or a life assurance policy can reasonably expect that their policy and pension savings will be paid to their spouse, partner or children, or any other beneficiaries where not applicable. The position is more complicated with a defined benefit (DB) pension scheme but generally a surviving spouse would, for example, expect to receive a pension benefit on the death of their spouse.
With all of these scenarios, the trustees of these schemes are under a lawful duty to make ‘reasonable enquiries’ into the circumstances of the death. The ‘reasonable enquiries’ are often uncontroversial and relate to obtaining a death certificate and considering representations from any interested parties or potential beneficiaries. Problems can arise however where a proposed beneficiary was involved in any way with the deceased’s death and here trustees should exercise caution.
The Existing Law
Trustees should be aware of section 1 of the Forfeiture Act 1982 prevents a beneficiary from benefitting where they unlawfully killed the deceased. The Act also provides that unlawful killing can include: “a person who has unlawfully aided, abetted, counselled or procured the death of that other”. This wording is sufficiently loose that it results in many ‘grey’ cases, and for these, trustees will want to seek expert legal advice. Even where there is no criminal conviction, trustees should be very cautious in awarding beneficiaries in these cases. One ‘grey’ area is where a beneficiary has assisted the deceased to end their own life. At present, this is an offence in English law under sections 2 and 2A of the Suicide Act 1961 which states that:
“A person (“D”) commits an offence if—
(a) D does an act capable of encouraging or assisting the suicide or attempted suicide of another person, and
(b) D's act was intended to encourage or assist suicide or an attempt at suicide.”
Trustees may already be familiar with cases like this, where an individual has taken their own life either by their own hand, or by travelling abroad to jurisdictions where assisted dying or euthanasia are legal. In contrast to the landscape of several decades ago, many life assurance schemes do now pay out in the event of a suicide providing certain conditions are met, such as the policy being over a year old.
What may be considered as ‘encouraging’ or ‘assisting’ a person to take their own life, or indeed to unlawfully ‘aid, abet, counsel or procure’ their death is somewhat ambiguous. If the beneficiary encourages or participates in the deceased ending their life, this will be a red flag for trustees to at least conduct a more robust investigation. However, questions of fact and degree emerge, such as what of the beneficiary who simply drives the member to the clinic? Or the beneficiary who has contemplative discussions about assisted dying with the member? Or for that matter, a beneficiary who simply sent the deceased an article on what assisted dying might mean for their pension?
The Draft Bill
With these questions in mind, the draft bill provides at section 24 that: “a person is not guilty of an offence by virtue of providing assistance to a person in accordance with this Act.” Section 25 provides an analogous protection against civil liability. ‘Assistance’ however, remains regrettably undefined. A new criminal offence would be created via section 26 which states: “a person who, by dishonesty, coercion or pressure, induces another person” to make their first or second declaration (that they wish assisted dying), or to self-administer the assisted dying substance, commits an offence with a maximum sentence of fourteen years. While being convicted of this offence would probably certainly preclude trustees from making a life assurance or pension payment to the respective beneficiary, ‘coercion’ and ‘pressure’ remain undefined in this context and so accusations or inferences of this offence on the part of beneficiaries gives poor clarity for trustees on what the correct course of action would be. The problems therefore of fact and degree raised above will still exist. The bill does aim to safeguard against coercion and trustees arguably should not infer coercion where support from a beneficiary has comprised neutral emotional support. Trustees may end up however being made to assess the relationship of the beneficiary holistically and draw inferences from its wider context.
The court does have the power under section 2 of the Forfeiture Act to modify or exclude the effect of the forfeiture rule if it is satisfied that the justice of the case requires it. Applications by prospective beneficiaries are permitted under section 3 of the Act and we consider some applications of this below. It is unclear whether the legislation, once enacted, would require applications by beneficiaries in the same way where they have assisted the deceased towards assisted dying, however lose their involvement. The draft bill does not refer to the Forfeiture Act. If beneficiaries wished to apply to court to uphold their entitlement to the deceased’s pension or life assurance sum, this is an expensive exercise and may be uncomfortable for beneficiaries to go through concurrently when the court is deciding whether to approve the assisted dying itself. There may however be logic in deciding both at the same time. Parliament does not appear to have identified these concerns in respect of beneficiaries’ rights directly.
The Suicide Act is proposed to be amended by the bill which states that individuals who engage in an act “capable of encouraging or assisting suicide or attempted suicide does not include the provision of assistance to a person to end their own life in accordance with the Terminally Ill Adults (End of Life) Act 2024”. It is a defence if the individual:
(a) reasonably believed they were acting in accordance with the Terminally Ill Adults (End of Life) Act 2024, and
(b) took all reasonable precautions and exercised all due diligence to avoid the commission of the offence.”
The interpretations of “reasonable precautions” and “due diligence” will differ depending on which judge considers them. In any event, it also relates strictly to the criminal liability and not the issues under civil liability or trust. It is worth noting additionally that the provisions of the Suicide Act and Forfeiture Act can also apply where the individual has taken the lethal substance but it has not resulted in their death.
In summary, the due diligence tasks of trustees will be complicated by the new draft bill. The bill’s vocabulary is broad to the extent that allegations of pressure and coercion will be very easy to make and therefore will require thorough investigation by trustees.
Case Law
The bill’s provisions are of course untested in the courts. However, existing case law has considered instances of assisted dying which offer guidance on what we might expect. For instance, the authority of Ninian v Findlay [2019] EWHC 297 (Ch) involved a terminally ill husband who chose to end his life by going to a clinic in Switzerland. His wife came to support his decision and arranged his travel. The court decided that the Forfeiture Act did not apply, citing that the Crown Prosecution Service’s decision not to pursue charges. The wife could therefore inherit and, in those circumstances, a life assurance or pension payment could likely be approved.
More recently, Morris v Morris [2024] EWHC 2554 (Ch) involved a critically ill wife who travelled abroad for assisted dying. Her husband was deemed not to be subject to the Forfeiture Act and the court relied on the fact that he consistently tried to convince his wife out of the decision and even reported the situation to the police. This represents a higher bar to be passed and were a spouse to support rather than oppose the decision, the new offences of pressure or coercion could well be inferred.
Were the current draft Bill to be passed, and without further clarification in case law or statute, trustees should still exercise great caution and seek legal advice where assisted dying has taken place. The bill creates an environment where a beneficiary who has been involved to support someone ending their life may well be ineligible to inherit due to the Forfeiture Act or may be criminally liable. Trustees could then be subject to claims from other potential beneficiaries for not taking account of all the relevant facts.
Consequences for the Industry
It is hard to predict how the insurance markets will react to the change although early reports indicate that it will not be revolutionary. At most, insurance policies, applications and trust documents will likely have to be re-drafted to account for new laws on assisted dying. Expert advice should be taken on how to re-draft policies in a comprehensive, lawful and sensitive manner.
Pay-outs in case of assisted dying may simply be outside the risk appetite for many trustees, especially of smaller schemes. They (and/or the scheme’s sponsoring employer) may consider requesting that their trust documentation should be amended to reflect that they will not pay out just as many already do not in cases of suicide. However, trustees and sponsoring employers should consider the potential impact of the Equality Act 2010 and whether and to what extent such adjustments can be made to the scheme. In any event, trustees may wish for individuals considering assisted dying to notify this to them, and failure to disclose may yet result in a reduced or cancelled payout, subject to their discretion.
There is also the question of whether a judicial decision to award a beneficiary who was involved in the assisted dying, further of our comments above, would interfere with the discretionary rights of the pension or life assurance scheme trustees. It is not clear that Parliament has suitably considered these issues.
Conclusions
The bill remains in its early stages and there is still time for trustees and employers to analyse what they should do to reflect the proposed changes. It is also the case that the remaining parliamentary stages give scope for further amendment to the bill. It is also even possible for the initiative to fail altogether.
Should the bill become law, trustees will encounter cases in which a scheme member has undergone assisted dying. For these, trustees and employers should seek legal advice on how best to investigate and record the claim, and in turn which class of beneficiaries should be paid. These claims will already be very challenging and sensitive. Yet the new bill creates significant uncertainties for trustees to wrangle with.
In practical terms, beneficiaries may be expected to demonstrate to trustees that they took a dispassionate and passive role in the deceased’s decision towards assisted suicide, which, in the bonds of family and concerning such an emotive issue, is a difficult starting point.
