life insurance beneficiary

georgebrown

I took out a life insurance policy with HSBClife back in 2001 for 20 years. It was written in trust to pay out to my business.
That business has now shut down.
I contacted HSBClife to change the beneficiary, they have told me I can't change the beneficiary and I must cancel the policy and set up a new one. The new policy to cover the remaining 10 years would result in premiums which are more than double my existing premium!
Is it true that you cannot change the beneficiary or are they just trying to get more money out of me?

dunstonh

What type of trust did you use?

magpiecottage

dunstonh wrote: »

What type of trust did you use?

Good question. If the policy was in trust to the business and th business no longer exists that suggests there is no longer a need for it.

Also, if you remain in good health then a replacement policy for the balance of the original term should be cheaper (because there is now no chance of you stepping under a bus between 2001 and 2012).

If you still need cover, it will also be cheaper to speak to an Independent Financial Adviser rather than a bank salesman.

vaio

magpiecottage wrote: »

......if you remain in good health then a replacement policy for the balance of the original term should be cheaper (because there is now no chance of you stepping under a bus between 2001 and 2012)........

I'm guessing the problem is that a 20 year policy for a 40 year old bloke starting in 2002 costs £x a month whereas a 10 year policy for a 50 year old starting in 2012 costs £2x a month.

OP get proper advice but if the the company was small and yours and was just shut down (rather than bankrupt/liquidated) then it might be the case that any future income (like your life insurance policy) will pass to your estate anyway in which case you can just carry on with the existing policy

georgebrown

It was a Business Trust (Trust for Partners)

The business was a family business, it was shut down due to a fall out! Both parties now in business again but seperately.

Bank says I cant transfer the beneficiary to my new business or to my depedants? They say I should cancel the policy and restart a new one at a much greater cost.

I cant understand why I cant just change the beneficiary of the policy? They are still happy to take my premiums in the meantime but wont tell me who it woud pay out to should I die?!

vaio

maybe worth talking directly to the insurer

dunstonh

I cant understand why I cant just change the beneficiary of the policy?

That is because there is no such thing as a beneficiary on a life policy. You create a trust in which the policy is placed and the trust has the beneficiary named. If the trust is flexible, the beneficiaries of the trust can be changed. If the trust is absolute then the beneficiaries cannot be changed.

weighty1_2

magpiecottage wrote: »

Also, if you remain in good health then a replacement policy for the balance of the original term should be cheaper (because there is now no chance of you stepping under a bus between 2001 and 2012).

I have noticed you say this on numerous occasions and just wanted to point out that it is incorrect.

For example, I ran a quote for myself - 30yr term, £500k. I then re-ran the quote making myself 10-years older but only running the term over 20-years. The cost increased from around £38 to £67 per month.

georgebrown

Who should I ask to find out if the trust is absolute or flexible? I have the trust document but I am struggling to understand it. It makes it sound like if I appoint trustees then they can decide who the money goes to? What would happen if the named beneficiarys no longer exsist?

The insurer is not very forthcoming with the answers?!