"Life of Another" Life Insurance Policy

Skibunny40

Hello there

Does anyone know of any insurance companies that offer "Life of Another" Life Insurance, without having to go through an IFA?

Thanks!

dunstonh

All plans should offer this method.

Skibunny40

Thanks Dunston H - certainly Aviva won't do it without going through an IFA and the advisor I spoke to said she wasn't aware of any insurance company would offer it without an IFA.

Maybe I just got a duff advisor?!

dunstonh

As an IFA, i am probably not the best one to ask as I see what they can do on their full offerings and not the cut down versions they offer through restricted distribution.

When you go direct to provider, it is not uncommon for the direct sales force to have restrictions on them both on their sales process and product offering. So, if they say they dont offer it then its probable that they do not.

Going direct to provider is often not the most cost effective way. Indeed, some direct to provider pricings are more expensive than an IFA receiving commission. Comparison sites may win on price. Although again, the product offered via comparison sites can sometimes be cut down from the IFA version.

Chris_Pollard

I too would recommend seeking out an adviser - I'm not one, but they have access to the best insurers, rates and their "know-how" will save you time and effort. Direct to consumer policies from insurers need to be straightforward. In a life of another (LOA) arrangement, the insurer will need to deal with two parties, the policyholder with whom the contract is effected, and the life insured who will need to provide all the medical and lifestyle (underwriting) information. It is a more complex arrangement from a facilitation point of view so most will not accommodate this arrangement other than through a financial adviser.

An LOA arrangement can be really effective so I hope needing to go through an adviser doesn't deter you and you potentially end up establishing a policy in a format that might not work as well as it should when needed.

Skibunny40

I was contemplating just going down the route of a regular policy but with a beneficary in trust ( if that's the right phrase).

Are there any potential problems with that method rather than Life of Another that I should be aware of? I just want a policy that pays someone outside my estate if I pop my clogs!

System

Skibunny40 wrote: »

I just want a policy that pays someone outside my estate if I pop my clogs!

That's not "life of another" insurance, that's just normal life insurance on your own life. It's quite usual to have the proceeds paid to another beneficiary rather than your own estate.

"Life of another" insurance is when you have a financial interest in someone else's life, eg a work partner, or an actress's legs if you are a film studio

HappyHarry

Skibunny40 wrote: »

I was contemplating just going down the route of a regular policy but with a beneficary in trust ( if that's the right phrase).

Are there any potential problems with that method rather than Life of Another that I should be aware of? I just want a policy that pays someone outside my estate if I pop my clogs!

It sounds like you just need a normal life assurance policy, that you then put in a trust.

Putting it into a trust is straight-forward. Life assurance companies generally provide a free trust from and guidance notes. You just complete the form, with signatures from yourself, the trustees and (if needed) witnesses, and send it back to the life assurance company.

kingstreet

Writing a plan in trust can be a lot more flexible than going LOA. Different trusts allow you different types/classes of beneficiary and contingent beneficiaries - so you can nominate Mr XYZ using a bare trust; or should you prefer, "my children at date of death in equal shares" or similar, using a discretionary/flexible trust.

Skibunny40

Thanks to all for their advice.

The original policies my husband and I had were set up ( through an IFA) as Life of Another, so I assumed that was the only way to do it.

Does a trust still pay out as quickly as LOA would? I want the money to go to the person who would be my child's guardian if both hubby and I died at the same time - such a cheerful thought!

dunstonh

The original policies my husband and I had were set up ( through an IFA) as Life of Another, so I assumed that was the only way to do it.

It was a popular method in the past and indeed, some providers only did it that way (I am going back a long way now). It is still available to do but typically joint life, first death has taken over or the use of trusts .

Does a trust still pay out as quickly as LOA would?

yes