Are my next of kin liable for my debt?

Farmer_boy

I have just had to sort out my mortgage as it came to the end of its fixed period. I have been told by an advisor at the Halifax to cancel my Life Insurance with Legal and General as I am a single man of 35 with no dependants, and take out Mortgage Protection instead. This I did, but when I went back to sign some paperwork, I was told by another member of staff that I needed Life Insurance because if I died in debt my next of kin, which is my mother, would have to pay off my debts. Are my next of kin still responsible for my debt, even at my age. I am very worried about this as my mother could not possibly afford to do that.

I am in negative equity with my property and also have a loan. Who is right?

getmore4less

Debts die with you.

Put in a complaint.

Are you sure you need the mortgage protection.

How safe is your job?

Does it come with any cover say full pay on sick or life cover with the pension.

How quickly could you get another one?

What benifits would you get?

How long will the policy pay out.

If just the mortgage then you may be better off with income protection not mortgage


The premiums migh be better paying down your debt

opinions4u

Farmer_boy wrote: »

I have just had to sort out my mortgage as it came to the end of its fixed period. I have been told by an advisor at the Halifax to cancel my Life Insurance with Legal and General as I am a single man of 35 with no dependants, and take out Mortgage Protection instead.

What do you mean by 'Mortgage Protection'? An accident / sickness / redundancy polcy?

On what basis did L&G sell you the policy?

I would be very surprised if the person who told you to cancel the life policy was in any way qualified to do so.

Ask them to put the recommendation in writing and see how they respond!

This I did, but when I went back to sign some paperwork, I was told by another member of staff that I needed Life Insurance because if I died in debt my next of kin, which is my mother, would have to pay off my debts.

Your estate is responsible for your debts, not your next of kin. In other words, if your house and belongings were worth less than your debts the lenders would have to write off the difference.

Farmer_boy

Thank you so much to 'getmore4less' and opinions4u'. Your feedback has been very useful. Thank you also for that list of things I should ask What a minefield! I now have accident/sickness/redundancy protection but no life insurance. I am beginning to think that the financial services are not there to enlighten and help the customer, but just confuse them into buying products that they do not need so they can get commission. I still don't know whether I have the right policy. I expect I will find out if, god forbid, I need to claim.:eek:.

herbiesjp

Any debts are left to the estate to deal with, but do not pass on to next of kin as their responsibility

The only reason why you may want the life cover, is to make sure that everything would be easier for your mother to deal with and leave her an unencumbered property.

If you did so, you would need to place the life policy in trust to make sure she got the proceeds directly, instead of being added to the value of the estate and exacerbating any potential IHT problems (and avoiding any probate delays)

Dan_1976

Banks and BS' have targets to sell these products. KNowing them they have probably put it down as info only to.

If you really are concernded then see an IFA or broker, they also earn but have the FSA standing behind them with a big stick. The banks etc have the FSA standing behind them with feather and blindfold!

If I was single I may go for ASU like you have, but I think more than likely I would have income protection and maybe some unemployment cover depending on my job situation.

AS a single man with a home you own, you will get very little from the government so you will be on your own.