BR and life insurances ??

desperate_mum_3

A couple of questions , I had a phone call from OR office from a lady saying my case had been forwarded to her and that she was the case clark ... is this a good sign that things are moving along ?
Also she said that I have 2 life insurances no surrender value but as they pay out on my death , if I die whilst BR the money would go to them not my children as stated in my will .... is this correct ? she then asked if I wanted to buy them back from the OR .... WHAT DOES THAT ALL MEAN ?

NorthernOne

Think this below sums it up. Seems you forfeit them.


http://www.insolvency.gov.uk/guidanceleaflets/guidetobankruptcy/guidetobankruptcy.htm

Point F.

f. Your life assurance policy
Generally, your trustee will be able to claim any interest that you have in a life assurance policy. The trustee may be entitled to sell or surrender the policy and collect any proceeds on behalf of your creditors. If the life assurance policy is held in joint names, for instance with your husband or wife, that other person is likely to have an interest in the policy and should contact the trustee immediately to discuss how their interest in the policy should be dealt with.

You may want the policy to be kept going. Ask your trustee: it may be possible for your interest to be transferred for an amount equivalent to the present value of that interest.

If the life assurance policy has been legally charged to any person, for instance an endowment policy used as security for the mortgage on your home, the rights of the secured creditor will not be affected by the making of the bankruptcy order. But any remaining value in the policy may belong to your trustee.

allofadither

Desperate Mum,

You don't have to forfeit the policies. I was in exactly the same boat as you. I have two policies one in my name only and one in joint names with OH.

I have 'bought' the policies back from the OR so if/when I die the OR will not get the money. You can buy life insurance policies back at a cost of 12 months premiums. So if you know what your monthly premium is just multiply it by 12 and that's the amount the OR would want.

I worked out what it would cost to start new policies and it was going to be way more than cobbling together the amount to buy them back. But it is an alternative if you can't find the 12 months premium for the OR.

Bit of a bummer having to come up with a lump sum payment just after BR. :eek:

desperate_mum_3

Exactly , it works out to #320 ( sorry pound sign gone AWOL ) The OR makes me laugh they want every penny accounted for then say well give us #320 and you can have the policies ... strange ... I'll have to let them lapse , annoying as I have paid them since 1999 , oh well ... thanks for info ..

pania

Hon don't let them lapse!!! To replace the policy now would be a hell of alot more expensive than they are now as they are based on your age. possibly by about £60 on top of what you pay now.
I guess you get them back when discharged so take the chance and leave them running, you may be discharged prior to the 12 months. if not then £320 is certainly worth saving for or asking your mum and dad for. SInce doing the job i do now i have realised the importance of policies like this. Please please don't put yourself at risk by cancelling them and risking a policy that you can't afford in the future.
Hugs
p
xx

desperate_mum_3

oh now i don't know what to do ... typical of me .... i just went on line and cancelled the direct debits .... i'm 45 is that old ??? ( no witty remarks please ... hahaha)

pania

hi desperate mum, i'll pm you.

pania

oooh just tried but wouldn't allow me! Ok was gonna say if you have access to the internet look on the legal and general website. you should be able to get a quote on there that will show you how much a policy taken out today would compare to what you are paying for your policy now.
DOn't put in any personal details just A N other, your age and whether you smoke.
This may help you decide whether to cancel and replace you policy when you are discharged or to leave the current one running.
Anything i can do give me a shout
Kind regards
P
xx

im1dful

pania wrote: »

I guess you get them back when discharged so take the chance and leave them running, you may be discharged prior to the 12 months.

A life insurance is like any other asset that vests in the estate, it vests forever and isn't affected by discharge. This means that even if you continued paying into the policy for twenty years before popping your clogs, the payout would still go to your bankruptcy estate.

desperate_mum_3

Really .... then it's not worth having one , but what happens when you die ?? people need money to bury you etc ... plus it would be nice to leave the kids a bit as i'm in rented council so nothing to sell .... what a mess ...

Richard_S

desperate_mum wrote: »

Really .... then it's not worth having one , but what happens when you die ?? people need money to bury you etc ... plus it would be nice to leave the kids a bit as i'm in rented council so nothing to sell .... what a mess ...

desperate mum,

I don't think life policies rest with the O.R for ever but I can't find any definitive information on the subject; why don't you email your O.R? They always seem more than happy to field answers to questions.

Regards

Rich