Life insurance pay outs and benifits

sammy1976

Hi, i'm posting for my friend. Her husband passed away recently and she is due to get a life insurance payout soon. She is out of work with 2 children. Will the life Insurance company inform the benifit office/government of the payout? thank you

nannytone_2

why? is she considering not declaring it?

a very iffy ( and illegal) thing to do.
and an overpayment of benefit lasts forever, and can be claimed back at any point.

if the payout is less than 16k she wont lose all entitlement to means tested benefit, and under 6k will not affect entitlement at all.

sammy1976

I think her plan is to keep it for her children. I've told her just to declare it as she doesn't need the extra stress. Or see a solicitor to see if it can be put in a trust for her children.

AnxiousMum

Is life insurance not meant to help provide for your family in the unfortunate situation that a parent might die?

She should most certainly declare the payout to the benefit agencies - dwp, council tax, housing etc., as if she is never in a position again to be able to repay any determined overpayment when they find out - they will just take it from her years down the raod.

The agreement she has with any agencies that she receives financial help from, stipulates that part of her contract is to notify them of any changes. Failure to do this can only cause problems down the road.

Did the husband leave anything in a will to the children? Was the wife the beneficiary of the policy or were the children?

Maybe she can use this money to help secure a better future for her and the kids - maybe there's a course she can do, a business she can start.....and by improving her lot now, she can work towards providing a better future for her kids.

Hiddenidenity

My dad passed away 2009, Leaving me and my sister at the time i was 19 my sister 13. My mum received a payout for life insurance, Declared it however a very big amount of it went on his debts and she provided proof and it didn't effect her benefits. Although her benefits are/were widows parent allowance and tax credits, So unsure of how it will effect other benefits. She must declare as they will find out.

jenblackrod

Even if she puts the money in trust for her children, it will still be counted as if she has access to it as it will be declared as 'deliberately depriving yourself of capital in order to qualify for benefits'. So thats not an option either. Best to be honest.

[Deleted User]

Hiddenidenity wrote: »

My dad passed away 2009, Leaving me and my sister at the time i was 19 my sister 13. My mum received a payout for life insurance, Declared it however a very big amount of it went on his debts and she provided proof and it didn't effect her benefits. Although her benefits are/were widows parent allowance and tax credits, So unsure of how it will effect other benefits. She must declare as they will find out.

if they were "his"debts then they died with him

[Deleted User]

Tory70 wrote: »

This is the third thread in as many days when people are asking for 'loopholes'. Nice to see nothing changes chez MSE *rolls eyes*

if you dont like the questions being asked then the exit door is this way
<<<<<<<<<<<<<

bobajob_1966

woodbine wrote: »

if you dont like the questions being asked then the exit door is this way
<<<<<<<<<<<<<

Not very welcoming towards a newbie?

paddedjohn

woodbine wrote: »

if they were "his"debts then they died with him

the debts dont just dissapear when the debtor dies if they can be satisfied from the deceased's estate, and im sure an insurance policy is part of the estate.

sunnyone

woodbine wrote: »

if they were "his"debts then they died with him

Your wrong, debts only die if there is no money in the estate to settle them and any insurance can be part of the estate, it all depends on the wording of the insurance policy and many people dont understand what insurance they are taking out.