Bank says I need life insurance for debt?

My_Own_Little_House

Hi all, I went to see my bank yesterday and the lady told me I need life insurance to cover my debt as she said it would get passed to my next of kin if I died. I'm 38, no house (living with parents), no partner or kids. Is it true my parents would be landed with my debt (£50k) if I died?

Thanks xxx

[Deleted User]

My_Own_Little_House wrote: »

Hi all, I went to see my bank yesterday and the lady told me I need life insurance to cover my debt as she said it would get passed to my next of kin if I died. I'm 38, no house (living with parents), no partner or kids. Is it true my parents would be landed with my debt (£50k) if I died?

Thanks xxx

Not unless your debt is jointly owed by one or both of your parents. When you die your debts need to be settled from your estate. If your estate doesn't have enough money to cover your debts then that's it, they will get written off.

McKneff

As in post 2,

The lady in the bank is talking rubbish and she needs putting right, by her superior.

ratrace

My_Own_Little_House wrote: »

Hi all, I went to see my bank yesterday and the lady told me I need life insurance to cover my debt as she said it would get passed to my next of kin if I died. I'm 38, no house (living with parents), no partner or kids. Is it true my parents would be landed with my debt (£50k) if I died?

Thanks xxx

Utter cobblers, No your debt does not get passed on anybody else as long its all in your sole name and nobody else has co signed or has joint debts with you

the person at the bank does not know what shes talking about, are you struggling to pay it off if so post a soa on here and the folks will have you and come up with ways to cut back on non essentials

also if it is affecting your mental health then please talk to someone about it such as samaritans etc....

what was the reason you went to the bank was it to consolidate the debts you have we need a bit more info and there are lots of debt solutions out there such as dmp's iva dro etc....

sourcrates

Banks are still lying to sell insurance products then i see.


Same lies, different product.

onwards&upwards

This needs to be reported, please write a written complaint to the bank with the date and time of the conversation.

tallyhoh

As above, report her for lying

My_Own_Little_House

Worrying thing then is she is the Senior Personal Finance Advisor... I said I wasn't going to sign up to anything without looking into it myself but she still took me through to the quote stage to see how much it would cost. She wasn't pushy though.
I went in to open a secondary current account so I could have the main account for wages and bills and a separate one for spending money. I also asked about a debt consolidation loan as she totted up my direct debits and saw how much I was paying each month and brought up the issue of any problems I was having. I asked about the loan though, not her. I asked about it as I can't get any 0% cards and all 8 are on 16-22%. A consolidation loan at 3.9% or even 6.2% would save me enormous amounts in interest although I knew I needed to look into early repayment penalties and whether I could make overpayments at all before applying properly. Anyway, I was not surprised to be rejected. I've just got to take my grandma home but will post an SOA when I get back. Thank you for confirming what I thought about the insurance. This is the reason why I love this site :A

enthusiasticsaver

No that is not true. Your estate is liable for debts. A consolidation loan is a terrible idea so good you were rejected. How did you get to £50k in debt?

An soa is a good start.

You need emergency savings.

Budgeting, saving and making a plan to reduce the debt is the way forward. Consolidating usually ends up with debt increasing as you trick yourself into thinking you have solved the debt problem whereas in reality you have just postponed dealing with it. Unfortunately if you have got to the stage of no more available 0% offers it is either a case of cutting expenses to the bone and paying it down until you start to get offers again or looking into a DMP or bankruptcy. An soa will give us an idea which way you should go.

theoretica

I can see that the bank might make life assurance a condition of giving you another loan - just as mortgage providers insist on house insurance. They don't want to be left out of pocket if a debtor dies insolvent!

My_Own_Little_House

theoretica wrote: »

I can see that the bank might make life assurance a condition of giving you another loan - just as mortgage providers insist on house insurance. They don't want to be left out of pocket if a debtor dies insolvent!

I would agree but we hadn't even discussed debts etc at this point. We sorted out opening the 2nd current account and then she went straight onto the life insurance thing. I had told her my debts at this point as she has been adding up my direct debits but we hadn't discussed a loan or anything.