Life Assurance company ignoring nomination form

purplerabbit75

Can anyone help please?

My Husband died suddenly just before Christmas leaving me with 3 young children.

He completed a nomination form leaving me 100% of his life assurance however the life assurance company have decided to give part of the money to his older daughter from his first marriage which means I am unable to buy our council house as it leaves me short. I am unable to get a mortgage as I currently do not work as my youngest isn't at school yet.

Our plan had been to buy the house then make a will and leave the house split between the 4 children. His older daughter lives with her mother and step-father and they own their house as when they divorced he gave everything to them, including the house they owned.

If something happens to me the children will be homeless as the council have made it quite clear that they will not suceed the tenancy again so I need to buy it to secure their future.

I have nothing against his daughter having some money from his 'estate' - I've known her for 12 years and we still see her since his death however I have to consider my 3 children also and their security.

It's already taken almost 8 months to get to this stage and I now only have 11 more weeks to buy the house before the valuation expires.

What is the point in completing a nomination form for pensions, life insurance, etc if they ignore it and do what they want???

FYI we are married however no wills are currently made.

Many thanks, Cindy

dunstonh

Sorry for your loss.

What is the point in completing a nomination form for pensions, life insurance, etc if they ignore it and do what they want???

A nomination is just an expression of wish but the decision still lies with the trustees. However, if the policy was placed in trust then that would be followed.

Most life assurance plans do not have a nomination. That applies to pensions and pension term assurance. Just telling an insurer how you would like it paid would not be sufficient for most plans.

Can you let us know what type of life assurance you are referring to? is it term assurance, pension term assurance, employer benefits?

purplerabbit75

Hello, thank you for your message.

The life assurance is through his work, ie death in service.

I appreciate that the nonimation form is not a legally binding document but why get people to complete one if they're going to do what they 'think is right'? Surely the person completing the form is the best judge as to where they want their money to go?

Kind regards, Cindy

dunstonh

The life assurance is through his work, ie death in service.

Ok. That is not life assurance. It is death in service. It is a trust based arrangement and the trustees have the say on who gets the benefits. All the individual can do is give an expression of wish.

I appreciate that the nonimation form is not a legally binding document but why get people to complete one if they're going to do what they 'think is right'?

Because there are people that give malicious nominations or forget to update it. The trustees have to do what is best. What the person wants is not always the best.

The child is a dependent of his. So, his nomination was effectively cutting her out of her entitlement. The trustees disagree with this. Had she been older, their decision would likely be different.

Surely the person completing the form is the best judge as to where they want their money to go?

In the pension forum this week we have had a poster who mentioned that an individual became terminally ill and recently died. The wife abandoned him around 6 months before his death. Yet his wife is the nominated beneficiary. He has two children from an earlier relationship. Who should get the money? The wife that abandoned him or the children?

It is scenarios like yours and the one I mentioned why advisers do not use death in service to cover mortgages. The payment is discretionary and often does not pay out to whom the individual may expect

purplerabbit75

Thank you for your response. I appreciate you taking the time and explaining the reasoning behind their decision.

In my opinion - if someone does not complete a nomination form then I agree it should be the Trustees decision but when someone has completed a nomination form then their wishes should be respected - whether 'right' or not, whether out-dated or not. The same could be said about a Will but it is the individual's responsibility to make sure it is correct and up to date.

Thanks again, Cindy

Quentin

purplerabbit75 wrote: »

when someone has completed a nomination form then their wishes should be respected - whether 'right' or not, whether out-dated or not.....

You only saying that because you not getting the lot.

The daughter is still his dependant! (ie he left 4 children, not just 3)

stephenni1971

Another thing is that because the payout is a DISCRETIONARY benefit - it does not form part of the deceased's estate for IHT purposes.

If the benefit was paid on a fixed beneficiary basis it would...

purplerabbit75

Quentin wrote: »

You only saying that because you not getting the lot.

The daughter is still his dependant! (ie he left 4 children, not just 3)

Quentin - I'm not saying it because I'm not getting all of it but they were HIS wishes. Had he have wished to give her part of the payout he would have specified it on his nomination form and I would have not had a problem with that decision. We discussed these things during our time together. Plus he'd already given security to his older daughter by giving her and her mother sole possession of the house and contents in the divorce.

Also I was informed by his company after his death that I would get the whole payment - if there had been a chance of not getting the whole amount they should have made it clear 8 months ago.

Stephenni1971 - many thanks for your explanation also.

Regards, Cindy

Quentin

purplerabbit75 wrote: »

Also I was informed by his company after his death that I would get the whole payment - if there had been a chance of not getting the whole amount they should have made it clear 8 months ago.....

The company have mislead you.

His employer was not able to predict the trustees decision, and they are not bound by his wishes.

You should take this up with them (and if their advice has caused you hardship you may want to seek legal advice)