Mortgage life insurance

Ollie1987

Me and my fiancee recently bought a house with a mortgage, the mortgage was in my name only but my fiancee paid 50% of deposit and pays 50% of the bills. Is it possible for me to protect her in the worse case situation, where i get mortgage life protection, where they settle the mortgage and my fiancee gets to keep the house? Basically at the moment she officially has nothing to do with house.

Thanks

Ollie

dunstonh

yes you can.

stephenni1971

It's simple enough really - you take out mortgage life cover sufficient to pay off the mortgage and then make sure if anything happens the money goes to her so she can clear it.

As a Fiancee she has no legal right to anything of yours if you die so you need to either

Write a will ( make sure you redo it when you get married as that will invalidate it )

Put the policy into trust

Write the policy in joint names so if you dies she automatically receives the benefit.

Ollie1987

Thats great thabks for both of your replies.

Regards

Ollie

kingstreet

Presumably, you bought the house and took out a mortgage in your sole name?

In which case, you need to make a will leaving the property to her and write a plan in trust for her benefit to provide her with the necessary funds to use to repay the mortgage.

If you fail to write a will and you die, your estate will be settled according to intestacy rules, which will mean your partner is entitled to nothing. The property will be sold to settle the mortgage debt and the residue will pass to whoever is your next of kin - possibly your parents, siblings etc if you have no children.

http://www.adviceguide.org.uk/england/relationships_e/relationships_death_and_wills_e/who_can_inherit_if_there_is_no_will___the_rules_of_intestacy.htm#who_cannot_inherit

kingstreet

stephenni1971 wrote: »

Write the policy in joint names so if you dies she automatically receives the benefit.

Is insurable interest needed?

stephenni1971

kingstreet wrote: »

Is insurable interest needed?

There is one - she lives in his house and if he dies she's out!

Ollie1987

Yes the mortgage is in my name kingstreet. Thanks for informing me about the will bit. Is it possible to also do it the orher way round. So if she dies i get the mortgage payed for me?


Ollie

kingstreet

Ollie1987 wrote: »

Yes the mortgage is in my name kingstreet. Thanks for informing me about the will bit. Is it possible to also do it the orher way round. So if she dies i get the mortgage payed for me?

Yes. If you do joint cover, the benefit is paid to the survivor if one of you dies.

I was a little reticent to mention this, as there could be an issue of insurable interest (nothing to lose on the death of the insured) but stephenni suggests this isn't the case, so it should be ok.

Get quotes for the cheapest form of life cover, decreasing term/mortgage protection, and have a look at how much it might be.

weighty1_2

kingstreet wrote: »

Presumably, you bought the house and took out a mortgage in your sole name?

In which case, you need to make a will leaving the property to her and write a plan in trust for her benefit to provide her with the necessary funds to use to repay the mortgage.

If you fail to write a will and you die, your estate will be settled according to intestacy rules, which will mean your partner is entitled to nothing. The property will be sold to settle the mortgage debt and the residue will pass to whoever is your next of kin - possibly your parents, siblings etc if you have no children.

http://www.adviceguide.org.uk/england/relationships_e/relationships_death_and_wills_e/who_can_inherit_if_there_is_no_will___the_rules_of_intestacy.htm#who_cannot_inherit

Also, doing one of the other is of no use, you have to do both. It's no good having the proceeds from the life insurance if your fiance is not going to receive the house (apart from her obviously having a lump sum of cash) and it is no good doing the Will if your partner has no way of paying the property off (other than having a property with some equity in it).

Ollie1987

You guys have been a great help. So just to be clear even tho my fiancee has nothing to do with mortgage if she died. The insurance would pay off the mortgage for me?

Thanks again

Ollie.