Life Insurance

cherry123_2

Hi,

Happy New Year to you all.

I have a question, Went BR on the1/12/2009 and as it stands at the moment I have no life insurance and 3 young children. If I take out a policy now will the OR have an interest in it.

thanks in advance.

cherry123:rolleyes:

sizzler

Hi cherry,

I have had differnet storys on this one.

Firstly some companys will not do insurance for people who are BR and some companys apparently charge more for people who are BR.

I think it would depend on the type of life insurance you had to weather the OR would have an intrest, maybe if it had a high surrender value.

My insurance was purely payable on death against my mortgage and my OR had no intrest in it.

Regards sizzler:j

tigerfeet2006

If you take the insurance out while you are BR then the OR will have an interest in it if you pop your clogs. If you pop your clogs after after your discharge and then he has no interest.

If you wait till after your discharge then the OR will have no interest.

StuntmanBob

tigerfeet2006 wrote: »

If you take the insurance out while you are BR then the OR will have an interest in it if you pop your clogs. If you pop your clogs after after your discharge and then he has no interest.

If you wait till after your discharge then the OR will have no interest.

I won't argue with one so experienced as you, however....

I had life insurance before I went BR. The OR took an interest in it, so I stopped paying the premiums and the policy was cancelled automatically.
[STRIKE]
I took out a new policy a couple of months after going BR. How can the OR have an interest in this? They don't even know it exists. I seem to recall actually asking my OR about this and she saying that would be ok. But my memory is hazy now I'll admit.[/STRIKE] EDIT: See below, looks like I am wrong here.

So my advice to the OP would be to ask your OR - mine was most helpful in all matters and very willing to answer questions.

LouiseSA

I spoke to my OR about taking out a policy, funded by my disposable income post bankruptcy and he advised me that even though it was funded by my disposable income post bankruptcy should I die before I was discharged then my creditors would want to make a claim on any proceeds from it.

StuntmanBob

LouiseSA wrote: »

I spoke to my OR about taking out a policy, funded by my disposable income post bankruptcy and he advised me that even though it was funded by my disposable income post bankruptcy should I die before I was discharged then my creditors would want to make a claim on any proceeds from it.

:eek: I'd better try not to pop my clogs in the next couple of months then !

dottydora

It surely has to be worth the risk SMB. I have kept my life insurance and when I can afford it will buy the beneficial interest in it as it would cost alot each month to get the same cover that I currently have. The way I look at it is that ok, so if I die and they want it, they won't take it all, only what I owe plus some costs for them - I hope! There will still be a fair bit left for my OH and children.

debtinfo

new life policies started during bankruptcy.

When you go bankrupt all your assets aoutmaitically vest in the trustee which is wht a pre exisisting Life policy will always pay out to the OR unless bought back no matter when it pays out.

Items you aquire during the bankruptcy are termed "after aquired assets". These do not vest automatically and have to be claimed by the OR. If you take out a new life policy the OR will not claim it as an asset but if it pays out during the bankruptcy the OR will claim the money. The subtle difference between this and a pre exisiting life policy is that the OR is nt claiming the policy, rather they are claiming the money paid out to you.

Just to add this is largley irrelevent as most bankruptcies last 12 months or less, it would normally take a few months before a bankrupt started a new policy and most new policies do not pay out if you die within the first 6 months. So the chances of this actually happening are slim.

LouiseSA

StuntmanBob wrote: »

:eek: I'd better try not to pop my clogs in the next couple of months then !

That was more or less my reply to the OR!!!!

out_of_cash

good luck 2 u louiseSA