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debtrider
Junior Member
494 Posts |
 Posted - 23 July 2008 : 14:14:45
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I have recently found that I have been paying £20 a month for natwest life insurance. It is a level term (15 year) assurance that never matures. Life cover is £62,954 if god forbid something happens to me. Obviously this would go to my mother whom I live with to help her pay off the mortgage or whatever. How does bankruptcy effect this life policy if I die. Would my mother still be entitled to the life cover benefit or would the OR take it all off her to pay my debts, which would in effect leave my mother homeless because she would not be able to afford the mortgage. If the OR is entitled to my life insurance would this be until I am discharged or over what period of time?
Debtrider |
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Ian Richards
Junior Member
United Kingdom
296 Posts |
Posted - 23 July 2008 : 14:48:25
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Hi
If something happened to you and the policy kicked in it would form part of your estate and it would then be down to the trustee to administrate the funds! So i'm afraid the creditors would get paid first.
Ian |
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Needafriend
Junior Member
United Kingdom
344 Posts |
Posted - 23 July 2008 : 14:52:08
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Hi Ian
How long do the OR have a hold over the policy for.
Oh sorry for barging in on this post its one i have been thinking about.
JO
"Lifes too short, Grab it while you can, Make each day count and live life to the full. Dont Worry- Be Happy!"
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debtrider
Junior Member
494 Posts |
Posted - 23 July 2008 : 14:54:29
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Would this be for the life term of the policy (still 11 years left) or until I am discharged. If what your saying is correct then there is no point in having any life insurance when bankrupt is there?
Debtrider |
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Ian Richards
Junior Member
United Kingdom
296 Posts |
Posted - 23 July 2008 : 15:04:46
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Hi again
I'm sorry, i misunderstood the question.
If while bankrupt you buy the policy from the OR it will NOT form part of the estate!
If it isnt it WILL.
It would be up to the OR if he should sell it back to you but as the chances of you dying within the term of bankruptcy would be highly unlikely the OR would probably let you buy it for a minimal fee. |
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Needafriend
Junior Member
United Kingdom
344 Posts |
Posted - 23 July 2008 : 15:07:35
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Hi me again
So let me understand what your saying is that during the bankruptcy only the OR will have a hold of your policy until discharge, after discharge the policy resorts back to us.
If we want to buy it back then the OR may give us the option to do so.
Is this right, sorry I get confused too.:)
Thanks
Jo
"Lifes too short, Grab it while you can, Make each day count and live life to the full. Dont Worry- Be Happy!"
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Ian Richards
Junior Member
United Kingdom
296 Posts |
Posted - 23 July 2008 : 15:08:51
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Hello again
My apologies i was reading the question and trying to answer it while on the phone...sorry. |
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debtrider
Junior Member
494 Posts |
Posted - 23 July 2008 : 15:16:42
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Hello Ian
Still don't fully understand. During Bankruptcy I could buy the policy from the OR (for how much? the value of the policy in death or what).
When I am discharged would the policy be returned to me with no charge.
Thanks again
Debtrider
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Ian Richards
Junior Member
United Kingdom
296 Posts |
Posted - 23 July 2008 : 15:16:57
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Hi
Ok to make things simple for you, the best thing to do is to speak to your OR after you have gone BR and tell him that you would like to buy his interest of the policy. As its a level term he may just charge you the minimal fee of £50 unless there is a surrender value and if there is a surrender value he would be looking for the surrender value amount, whatever that may be.
Ian |
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hammy0107
Junior Member
399 Posts |
Posted - 23 July 2008 : 15:32:49
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I have just bought my life assurance back from the OR for £50.00. You have three real choices:
1. Don't do anything and if you were to die during BR any payout would go into your estate.
2. Stop paying your premium, which leaves you without cover. (if you were to restart it after BR then most policies do not pay out within the first 12 month of the policy)
3. Buy it back from the OR. If it doesn't have a surrender value then you can buy it back for £50.00.
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debtrider
Junior Member
494 Posts |
Posted - 23 July 2008 : 15:37:49
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Thank you for all your help, everything is becoming clearer now. Just one thing, when discharged would the policy be returned to me or would I still have to buy it back.
Thanks again
Debtrider
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Helpful Advice
Average Member
United Kingdom
646 Posts |
Posted - 23 July 2008 : 20:01:12
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Hi Debtrider,
You would need to buy the policy back from the OR unless you claim this as exempt property within the Bankruptcy you can discuss this with your OR and he will explain all the options.
Kind Regards,
Brett England
Bankruptcy Specialist
England,Jackman & Spacey
WebSite www.ejands.co.uk
View my personal story & blogs at:
http://brettengland.blogs.bankruptcyhelp.org.uk/ |
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debtrider
Junior Member
494 Posts |
Posted - 24 July 2008 : 00:48:05
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Sorry to go on about life insurance in bankruptcy. My mother as been paying into her insurance for some 15/20 years now. She is 76 years of age and if something happened to her during my bankruptcy what would happen to that money. Under normal circumstances that money would be mine to pay for funeral expenses. Don't tell the OR would want that aswell. My mother as paid into that for life insurance most of her life, not me.
Debtrider |
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Suzanne
Average Member
United Kingdom
869 Posts |
Posted - 24 July 2008 : 08:43:04
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Hi
Just to clarify. The life insurance policy is considered an asset in the bankrutpcy. So if you die at any point before or after discharge the OR has a claim. This is why it is advisable to either let the policy lapse or buy it back.
Any windfall, be it from inheritance, lottery win or insurance payout is an asset in the bankruptcy and the OR will claim this if it is received or receivable prior to discharge.
Suzanne Stocker
Bankruptcy Manager
Jones Giles Ltd
www.jonesgiles.co.uk
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debtrider
Junior Member
494 Posts |
Posted - 24 July 2008 : 09:31:43
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Thanks for your help Suzanne. Just have to make sure nothing happens to my mother before my discharge and also buy my policy from the OR. So my mother has paid all her life into insurance (her money not mine remember) and I would not even have enough money to pay for her funeral. That sound pretty unfair to me. I know these are all hypothetical questions but you never know.
Debtrider |
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Topic |
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Life insurance when bankrupt
