Insurance claim pre death

lisyloo

I think it would be very harsh to say no ceremony at all because there is one with a public health (previously called paupers) funeral.

Undervalued

lisyloo wrote: »

I think it would be very harsh to say no ceremony at all because there is one with a public health (previously called paupers) funeral.

Yes, but that is you and me picking up the tab when there are no other assets. That too raises difficult moral issues.

Here there are some assets (in the form of an insurance payout) but debts that won't get paid if the money is spent on a funeral.

Clearly, within reason, that is what the law allows so it is a perfectly justifiable path to follow.

A difficult decision, I am glad I don't have to make it and I wouldn't criticise either choice.

Malthusian

Undervalued wrote: »

That raises and interesting moral question over whether the family are more entitled to a funeral service or the creditors are more entitled to at least some of their money?

The family are more entitled to a funeral service.

The creditors charge interest on the loans partly to cover the risk that the debtor dies and there are no assets in the estate, after paying for the debtor's funeral as per the law. Borrowers who don't die and leave insolvent estates don't just repay their loans, they collectively repay the loans of those who do leave insolvent estates. That being the case, there is no reason the insolvent estates should pay as well. The creditors are not entitled to have their cake and eat it.

If the law stated that creditors had to be paid before the funeral, that would be different as loans would be marginally cheaper as there would be less risk of people dying leaving no money for creditors.

However, the benefit to society of people paying marginally less interest would be considerably outweighed by the moral, religious and public health implications of being unable to dispose of bodies until the administrator of the estate had worked out whether there would be enough money after paying the creditors to pay for it.

Which is why the law says that funeral directors stand first in the queue.

(If anyone is thinking "but what if they borrowed money from their mate down the pub who didn't charge them interest and will never recover the money from other borrowers" - a lender mispricing risk is not the funeral director's or the family's problem.)

Fire_Fox

FiFiStup wrote: »

Hi, my father in law died last week- there is no money at all ....
I contacted them yesterday & they are saying they need letters of administration - BUT there is no estate - the only money will be the insurance payout.
am I correct in this & how can I get them to accept to pay out to the next of kin (my son).
Can anyone advise the wording of a letter I need to send them please as I will be sending the death certificate.
We need the payout to pay for any funeral.

FiFiStup wrote: »

no wife - divorced
one son - estranged - no contact
my son - grandson - noted as next of kin by gdad

FiFiStup wrote: »

Thanks for this The Co-op legal services (one of may phone calls I have made) - the chap I spoke to gave me free advice & he suggested an indemnity...… I wondered if anyone could guide me to an appropriately worded one for me to send signed etc to the insurers?

The grandson was noted where and how as next of kin? Is the grandson an adult?

The executor of the will, the administrator if FIL died intestate or the legal next of kin should seek advice or research the legal position themselves (run a search on this board and read legal websites).

By trying to be helpful you well may be intermeddling - yes that is a word! - in an insolvent estate. That might leave one or both of you open to claims from creditors if you make mistakes.

lisyloo

Undervalued wrote: »

Yes, but that is you and me picking up the tab when there are no other assets. That too raises difficult moral issues.

What’s the moral issue with a public heath funeral? As the name implies it’s for everyone’s benefit. It’s absolutely minimal.
Are you arguing over the tiny cost for minimal dignity?
I’d argue it’s absolutely minimal and we should as a society afford dignity in all situations.

If you are implying people should have better financial planning then I’d agree in principle but life isn’t always like that when people have suffered hard times.

I can’t see the moral objection to an absolutely minimal funeral on public heath grounds.

Undervalued

lisyloo wrote: »

What’s the moral issue with a public heath funeral? As the name implies it’s for everyone’s benefit. It’s absolutely minimal.
Are you arguing over the tiny cost for minimal dignity?
I’d argue it’s absolutely minimal and we should as a society afford dignity in all situations.

If you are implying people should have better financial planning then I’d agree in principle but life isn’t always like that when people have suffered hard times.

I can’t see the moral objection to an absolutely minimal funeral on public heath grounds.

No, unlike you I am not arguing any particular point of view.

Until I read this thread I had no idea what happens in such situations.

Silvertabby said.....

Unless any of the debts were secured on a property (ie, mortgage) then the funeral costs come before any creditors, £3K may not cover the full cost, but it will be a great help.

Assuming that is correct I then asked if there was an upper limit.

The answer to that was less clear but speculated that the creditors may be able to challenge excessive funeral costs.

I find it a very difficult dilemma. Clearly it seems the law allows at least a "normal" funeral cost to come before settling any debts. I would never criticise anybody for insisting on their rights under the law.

However if I was a creditor I may feel aggrieved that I was paying for the family's choice of funeral (within reason) and that anything beyond the cost of a direct cremation should be down to them.

So, if I try to put myself in the position of the family I genuinely don't know what I would decide.

Malthusian

Undervalued wrote: »

However if I was a creditor I may feel aggrieved that I was paying for the family's choice of funeral (within reason) and that anything beyond the cost of a direct cremation should be down to them.

The vast majority of creditors are corporate entities which are incapable of feeling grievance. The idea of a creditor being aggrieved is usually a category error. A bank can no more feel grievance than it can pins and needles or boredom.

So, if I try to put myself in the position of the family I genuinely don't know what I would decide.

Hopefully to have a normal funeral - the same funeral they'd've held if the deceased left say £20k net - and charge the expenses to the estate. Grieving families are highly unlikely to start buying solid gold coffins and hiring full orchestras just to spite the creditors.

If the creditor was a close friend of the deceased and lent money interest-free as a favour, I agree there might be a moral issue over whether to limit the expenses of the funeral to ensure they got some money back. But if it would require having a public health funeral, forget it. There is no moral case to pay off creditors with council taxpayers' money. Even before we consider the effect it might have on the bereaved.

lisyloo

Undervalued wrote: »

No, unlike you I am not arguing any particular point of view.

I was responding to your comment about moral issues in the context of a public heath funeral.
I’m confused as to what the moral issues are for the tax payer acting in the interest of public heath when there isn’t an alternative.

Undervalued

lisyloo wrote: »

I was responding to your comment about moral issues in the context of a public heath funeral.
I’m confused as to what the moral issues are for the tax payer acting in the interest of public heath when there isn’t an alternative.

"Acting in the interest of public heath when there isn’t an alternative" would be a direct cremation (or equivalent burial) and nothing more. Obviously that has to be met from the public purse if there is no alternative.

But that is not the dilemma here. There is enough money (apparently) to pay for that and more in the way of a funeral from an insurance policy. The moral question is whether it is right to do more than the absolute minimum necessary when it means that the deceased's creditors will go unpaid.

Malthusian

There's no more moral grounds to have a minimalist funeral to benefit the creditors than there is to have a minimalist funeral to benefit the heirs of a solvent estate.

Less, in fact. Because creditors charge interest to cover the risk of bad loans, including insolvent estates. Heirs don't have any cover.

One difference is that the heirs also attend the funeral so spending the estate's money on the funeral marginally benefits them - but usually the majority of people at a funeral are not heirs, so that isn't really a major consideration. If an estate holds a relatively modest funeral for 20 people of whom 2 are the heirs, every £1 spent on the funeral gives the heirs only 10p of benefit, in very cold-hearted monetary terms.

They should have the same funeral they would have had if the deceased had left a modest positive balance, assuming there will be enough ready cash in the estate to pay for it.