Bankruptcy and Life insurance

vickyh_2

Hi All
I hope someone can answer this for me. I have just been diagnosed with cancer , I have overwhelming debts and now would seem a good time to throw in the towell, but I have a critical illness policy that I think will pay out, would I have to hand over the money to the OR? Unfortunately they'd find out because I pay by DD. It will be a substantial amount of money, but as I will soon be homeless, jobless and am a single mother of a special needs child I could do with a bit of cash- to say the least!
Any advice would be helpful.
Thanks
Vicky

skylight

Are you BR?

Personally....
Erm... jugular here, but most critical illness covers only pay out once, so if you were to not make it then there would be nothing to leave your child. Once you get the all clear then you are unlikely to ever get insurance again anyway.... Lots to think about.

If you were to make a claim, is there enough there to buy somewhere for you and you child plus clear most debts either in full or a full and final settlements? or enough to rent somewhere, pay for the furniture/deposit/6 months in advance but nothing else sort of thing?

I guess your options do depend on how much you owe and how much you could expect to claim plus circumstances.


And I am bumping too as I am not sure on the critical illness cover and the OR potentially taking it. Normal life insurance he would; personal injury compensation he cannot and this sort of falls in the middle.

hattybee

Quote from Insolvency Service handbook "Where a bankrupt has an interest in any life assurance (including critical illness policies), they may vest in the trustee as part of the insolvent's estate"

i.e. the OR would probably grab the money.