Life Insurance

FTB129

Hi There

Not sure if this is the right forum (apologies if not please redirect me)

I bought a house on my own last year and my partner lives with me but because of terrible credit rating he is no way attached to the house apart from on the Council tax bill, (not on mortgage either).

Anyhow god phobid if anything happens to me how I can ensure that he will be have rights to the house as such. Do I need to draw something up with a solicitor?

I don’t currently have a life insurance policy is this advised?

Any help would be really appreciated.

Many Thanks

nidO

You will want a life assurance policy to make sure your mortgage is paid off if you die, if you die without an appropriate policy the bank will require the mortgage be repaid from your estate, which will (almost certainly) require the house be sold.

Then, unless you and your partner are married, you'll need a will drawn up leaving the house to him. Without a will leaving the house to him, if you're not married your partner has no right to the house (barring him going to court for financial provision from your estate) and it will go to your closest living relative (down, then sideways, then up) and if you have no living relatives, the government get their mitts on it.

kingstreet

Life cover written in trust for his benefit and a will leaving him the property mean he would legally own it and would have the money to pay off the mortgage if anything happened to you.

Note - if you do not write the policy in trust and make no will, the benefits will pass into your estate and will be distributed according to the intestacy rules which may mean he gets nothing and has no home as well.

FTB129

Thank you both, thats really helpful. Im completely clueless to all of this which is just ridiculous.

I will get speaking to a solicitor in the mean time in regards to a will.

Is there a particular life insurance i need to take out - or are any recommend? i have seen ones that cover a mortgage is that my best bet?

King street what do you mean when you say - Life cover written in trust?

Your_Hero

FTB129 wrote: »

Thank you both, thats really helpful. Im completely clueless to all of this which is just ridiculous.

I will get speaking to a solicitor in the mean time in regards to a will.

Is there a particular life insurance i need to take out - or are any recommend? i have seen ones that cover a mortgage is that my best bet?

King street what do you mean when you say - Life cover written in trust?

If you're looking to just cover yourself upon death then you need a 'decreasing term assurance' aka a mortgage cover. This is only suitable if you have a full capital and repayment mortgage and NOT an interest-only as the cover decreases over time (the idea is to mirror the reduction in your mortgage balance over time). Usually you should also, if affordable, consider adding on a critical illness cover with it to pay out upon serious ill health.

Life cover written in trust is what it is. A trust is a legal arrangement whereby the proceeds of the insurance pays into it (if you die) so that it will be paid out immediately and not part of your estate. You may be able to do this directly with insurers when you take out a life insurance plan (ask for before taking out) or you may need to go to a financial adviser to do the lot for you.

As the others have said, since you are not married, you will definitely need a will so that your partner will benefit from your estate.