3 General Life Assurance Questions......

Tunstallstoven

Hi

I've just been reading through some thread and there's some really helpful advice.

I wondered if anyone can help to answer a couple of general questions which still remain unanswered in my head:

1. Do all Joint policies only pay out on the first death? If so, what would happen if my partner and I died at the same time (for example, in a car accident)?

2. Does the Assurance provider have any say whatsoever in where the money goes to on a pay-out? Or do they simply pay out AND THAT’S IT. A lot of discussion refers to policies that will “pay off the mortgage if I die”. Is this a type of Assurance Policy product linked specifically to a mortgage? And if so, does it differ to a more general Life Assurance policy that could be used to pay off the mortgage, but could also be used for other purposes?

3. On a related note, if I wanted Life Assurance to cover a dependent from a former relationship AND my partner in my current relationship (by paying off the mortgage and perhaps leaving a bit of money as well), would I need two separate policies? Or - if it was more cost effective - would I be able to get one policy and specify in a will how I would like the money to be split on my death?


I'll keep reading....!.....but would appreciate any clarification on thes epoints in the meantime.

Many thanks

Max

lisyloo

1. If you died together the policy would still only pay out once (probably to the eldest). Our wills cover that situation, so you might want to write your wills with that possibility in mind. We don't inherit from each other if we die together so we have two estates rather than one which gives us two inheritance tax allowances. I believe there is a clause of about a month which covers a delayed death from injuries in the same accident. A solitcitor should be suggesting that sort of thing to you.

2. In general the money can be used for anything you want. Polcies can be assigned to a mortgage lender but I think that's quite unusual these days. Generally they just pay out a lump sum.

3. Yes you can get one big sum and split it how you like in your will.

dunstonh

1. Do all Joint policies only pay out on the first death? If so, what would happen if my partner and I died at the same time (for example, in a car accident)?

Joint life, second death plans wouldnt pay out on first death.

2. Does the Assurance provider have any say whatsoever in where the money goes to on a pay-out?

It goes to the surviving policy owner if joint life first death. If its single life it will be paid into your estate unless you have the policy set up on "life of another". i.e. owner is not the life assured. Or you have the policy written in trust.

A lot of discussion refers to policies that will “pay off the mortgage if I die”. Is this a type of Assurance Policy product linked specifically to a mortgage? And if so, does it differ to a more general Life Assurance policy that could be used to pay off the mortgage, but could also be used for other purposes?

There is no direct linking. Its just said like that for convenience. However, the beneficiary could use the money for other things if they wished.

3. On a related note, if I wanted Life Assurance to cover a dependent from a former relationship AND my partner in my current relationship (by paying off the mortgage and perhaps leaving a bit of money as well), would I need two separate policies? Or - if it was more cost effective - would I be able to get one policy and specify in a will how I would like the money to be split on my death?

You would need separate plans as you are covering two different people who are unlikely to consent to being held together on a joint life plan.