Tenants in Common Life Insurance

gideon1969

Hello all,
My life partner and I (not married) have a mortgage together and we are Tenants in Common (50% each).

My question is about our life insurance. If one of us dies, will the life insurance automaticly pay off the half of the mortgage of the surviving partner, (as well as the deceased?) Or does it have to be stipulated in the deceased's will?

thanks very much in advance for any replies,
mark

lisyloo

If one of us dies, will the life insurance automaticly pay off the half of the mortgage of the surviving partner, (as well as the deceased?) Or does it have to be stipulated in the deceased's will?

I don't think it will happen automatically. It will need to be specified/set up somewhere.

Also, are you aware of the inheritance tax implications of being tennants in common?
Persumably you got some advice when you chose to go down that route?

But I believe as tenants in common, the other half would have to go via the will and is potentially subject to inheritance tax.

dunstonh

If one of us dies, will the life insurance automaticly pay off the half of the mortgage of the surviving partner,

no. If you set up a joint life, joint owner, 1st death basis life policy then it will pay the proceeds to the surviving owner who can then decide what they do with it.

Or does it have to be stipulated in the deceased's will?

A joint life, joint owner policy would not fall under the cover of the Will as the proceeds are paid to the surviving owner. Not the estate of the deceased.

lisyloo

But I believe as tenants in common, the other half would have to go via the will

Just to clarify I meant the other half of the house (not the proceeds of the insurance policy).

gideon1969

thanks very much indeed for the answers,
regards, mark