help with life assurance please

weesie81

have followed advice on here and gone through cavendish where best quote was norwich union / aviva
was happy with price sent off all forms etc is a joint policy with my husband and we have 3 small children,however had a call saying i have not put "in trust" for my children.
so if anything happens to one of us the other will benefit but if something happens to both kids get nothing?

he said on phone i need a financial advisor to do a form but how do i go about that? i don't actually have one or should i have asked cavendish about it since i paid them the fee?
sorry its all a bit confusing

payless

would go into estate ( dealt under will or inestate ruules) so most likely kids would get it eventually - but prudent to do a trust.

I assume you took the cavendish no-advice route. The fee you paid is for processing, but premium is discounted to refect the service provided ( or lack of it)
Other advisers would likely have taken a bigger fee or commission ( so premium a bit more) but offer a full advisory service.

You can do the forms yourself ( although on a joint policy the wording on trsus needs tto be carefully done) Nothing stopping you paying for the extra service ( if needed) elsewhere ( IFA, insurance adviser, solicitor) if you are happy with the policy. Although I'm sure most advisers would have recommended a different setup of the policy .. as price is not everything.

weesie81

thanks for your reply
so i can go to any financial advisor and they can do this but it will cost me a fee?
any ideas how much roughly i should be looking to pay?

payless

You don't have to have a financial adviser- its a matter of folowing the form . You of course (hopefully) will get someone with experience- not sure if professionall indemnity would cover trust advice on policy written elsewhere though!

Personally I would not do it ( maybe have a different approach if on a longer standing policy though) given I'll likely disagree with the original policy choice/setup

stephenni1971

Is a trust necessary?

What is the value of your estate if anything happened to each/both of you?

payless

more worrying is the " execution only " firm says

if something happens to both kids get nothing?

weesie81

hi the policy is for £200,000 over 20 years and its costing us £11.80 per month we have just gone for bog standard life assurance with no critical illness cover or anything.

i did not know about the trust thing till they rang me at home i just assumed it would benefit our children if the worst happened which i suppose is ignorance on my part its the first time i have had any kind of policy like this.

i just wondered if i should choose a financial adviser at random to help me or whether i should ask the company for help? also roughly how much it would cost to do so?

stephenni1971

Whenever you take a life insurance policy, if anything happens to you the proceeds go into your estate, and are then distributed according to your will.

If you die without a will, then the laws of intestacy apply, and your assets are distributed according to a pre set formula, which may not match your wishes.

Trusts can be used a number of ways..

1. It takes the money from the policy, the 'asset', out of your estate - which can help avoid inheritance tax. That said the limits are pretty high, currently £325,000, and there is no IHT between spouses. In addition if one spouse dies and does not use the allowance, it can be carried forward, meaning the survivor could have £650,000 limit.

2. If there are debts to be paid within the estate, having the policy paid in trust can help as it can be paid out and used much more quickly than if it had been paid directly into the estate.

Trusts can be a useful tool, but they are not necessary for everyone.

Whoever said without one your children may not get anything was ignorant in the extreme.

OshayAway

Agreed... sounds suspiciously like a bit of scaremongering to squeeze a few more £s out of you!

Putting your policy in trust does have its merits though as outlined above. Out of interest, how much did Cavendish quote to put the policy into trust for you and did they state it would be an information only arrangement or advised recommendation?

weesie81

i have not asked them yet as i was unsure if they could help me? so thought i would check here first since this is where i got the cavendish site from originally.

scroogeboy

If you do want to go ahead and put it in trust, I suggest you phone the insurer and they will almost certainly send you the relevant form

I have done exactly this when I got a policy from them via a discount broker

Good luck