Life assurances

dojoman

I am about to buy back the BI on our LI. I know while I am still BR, that if anything did happen to one of us, the proceeds would go to our creditors. How do I change things so that if this happens, the proceeds would go to my son and I think and hope not to our creditors?

script

The best way is to have the policy in trust with your son as the beneficiary.

(I'm not exactly sure how you actually do it - it might be best to speak to a solicitor - checking beforehand what their fees will be to "write it up").

dojoman

Anyone else?

the-muffin-man

As script said - but they may already be written in trust to your spouse though (many are), in which case you don't have to buy them from the OR in the first place. Two of my 3 policies where like this so I only had to buy their interest out in one.

You do need to get professional advice on this though as it gets pretty complicated! This was free from the company who our policies are with.

Also - have you got a will as this may need to be altered while you are still BR.

dojoman

Anyone else?

super7

dojoman wrote: »

I am about to buy back the BI on our LI. I know while I am still BR, that if anything did happen to one of us, the proceeds would go to our creditors. How do I change things so that if this happens, the proceeds would go to my son and I think and hope not to our creditors?

Hi dojo.

I'm in the same boat. Just been on phone to IS helpline.

So:

1) Once you've bought the BI the OR/Creditors have no call on your policies, regardless of you being discharged or not.
2) You are free to put the plans in trust.
3) I was an IFA so I know a bit about this. If you put your cover in trust then it will be paid out quicker if the worst happens ie no waiting for probate etc.
4) If you contact the companies you hold your life assurance with they'll send you the appropriate trust forms. If it's Critical Illness/Life Cover combined you'll need a different type (obviously in the event of a critical illness you'll want the money.
5) The forms can be a bit daunting at first (the not a standard format for some reason) but read the bnotes and you'll be ok. You can pm me if you need/want any help.

Good luck.

dojoman

Thanks super7, that is brilliant, much appreciated.

script

Thanks super that was a great answer.

Just one thing that maybe the IS didn't make clear.

If you have a life policy and it pays out to your estate (i.e.not a beneficiary).

And if you die during your B/R - even if you have bought the "interest" in the policy -

The OR will have a claim for all the money.