In need with advice again friends - life insurance

MicheH

We surrendered our life assurance policy when we went br in August. I really want to get new insurance for DH and myself as I think it will ease some of my anxiety.

Now for those of you who don't know me I have always said that should I receive any inheritance I have no qualms with it being used for creditors whilst i'm undischarged. These questions arn't to 'diddle the system' they're questions so I can effectively plan for eventualities that may efect my little family.

Am I correct in thinking that should one of us die (both bankrupt) then whilst undischarged this life insurance policy would go towards paying the person who has died debts in the bankruptcy. The other persons debts in banruptcy would not be effected?

Am I also correct in thinking that any funeral cost would be taken from the life assurance policy before anything else.

Then would a chunk of it pay whatever you owed in BR.

Then what ever is left would that go to the surviving spouse or the children or would that chunk that was left then be used to pay off the remaining spouses debt included in BR?

Are these questions only valied whilst undischarged and in 10 months time life assurances would not have any effect on any of our BR?

Also, what on earth can I do if I lost one of my children. We have no access to credit, how could we pay for their funeral?

I am so sorry to post these questions. Many of you know what I'm going through just now and just want to feel that whatever could happen we'll have covered every option to keep the family supported for a while.

Miche x

Bohemian_Raspberry

I can't give you any advice Miche but just wanted to send you a virtual hug, i can tell how much you're worrying about this

Three_Clicks

Hi

If you die your insurance goes to your BR to pay off yours debts.

If your child dies (god forbid) and you have no £ the state will help you with the funeral costs...

I hope this helps.

the-muffin-man

Hi MicheH

There are ways of having life insurance policies written in 'trust' so that the OR can't take any of the proceeds (two of my 3 polices were like this and we didn't have to pay the OR the £50 to buy their interest out). I'm not sure of the technical jargon relating to this so you'd have to discuss it with the Life Insurance provider.

Re the amount of cover - make sure you take out enough cover to pay off yours and your husbands debts, as contrary to popular belief not all debts die with the person who accrued the debt and could pass to you.

MicheH

Thank you all so much.

So if we both took out cover for an amount that was enough to cover what we both owed then all the BR would be paid off and we the other spouse get to keep what was left after the OR took what was owed?

Thank you too for telling me that there is help there for funerals if you have no money. It's a horrible horrible subject but I need to know. Thanks again

dollparts

Miche, I attended a funeral of a person that had a state-paid funeral. It was extremely basic-the coffin left from the house straight to the cemetery completely bypassing any church service.

The pall-bearers said a blessing and the coffin went in and that was it.

I believe it is the DSS that arrange these grants for burials for those with no provision upon dying.

I had no idea when I attended that the family of the deceased hadn't paid for the funeral, it was quite shocking as it just seemed so sad and hollow.

We found out later that the grant would not cover the cost of a headstone either. It was just a wooden cross in the ground- I actually paid for one to be laid myself because I just felt so saddened by it. It was years ago now, but it stayed with me.

I don't want to alarm you, and I hope I haven't. I just wanted to tell you the reality of state paid services and what it means to have one.

MicheH

You know what Doll, I've felt so alone in this process with family turning their back on us to help BUT if any thing came to happen to my girls I'd beg everyone of them to put some money in a pot. I will never let that happen and I doubt my family members will either. I guess it's just the unknown, I've lost the bit security (my house) and now i'm in turmoil, I just want to take some control and have things in place for any thing that might happen in case. I guess life isn't like that.

Thanks for letting me know - I've lived in a box all my life.. albeit a very expensive one!