Bankruptcy and life insurance.

74leeboy

Hi, I'm just looking for a bit of info. My wife has just applied for bankruptcy. She had her phone interview this morning and it all went well. The OR has asked her for her life insurance details to check the policy, to see if in the future, if one of us dies, the payout will go to us or into the bankruptcy. If it does go to the bankruptcy, should we cancel it, and then can we set up a new one straight away, or wait until her bankruptcy is over in a year's time ? Sorry for the long winded question

philnicandevan

Evening/Morning 74lb, its a difficult one really as some OR's offices differ than others BUT did the examiner not discuss the policy at all? in some cases if you expplain how difficult further policy applications will be once bankrupt the receiver "might" allow you to buy out their interest in the policy meaning you could keep as long as payments are not too excessive.....(buy out usually involves a flat fee of around 50 quid or so..

bit of a read here

https://bankruptcyexpert.co.uk/articles/bankruptcy-and-my-life-insurance-policy

74leeboy

Thank you. I think the or said she would look into the policy. I'll double check with my wife and maybe see about what you suggested. 👍

74leeboy

Just a quick update. The OR has claimed interest in the life insurance policy and any payout half would go to the OR. 
So we have cancelled the policy and will set one up after bankruptcy, but still save the payments into a savings account. 

SkintSquaddie

74leeboy said:

Just a quick update. The OR has claimed interest in the life insurance policy and any payout half would go to the OR. 
So we have cancelled the policy and will set one up after bankruptcy, but still save the payments into a savings account. 

Would the OR not want access to the savings or failing that the money you would have been paying into your life savings will now become surplus in the OR's eyes as you will have to inform them that you have cancelled the policy anyway

Minkym00

You could have bought the OR's interest in the policy for £50.

The OR has no claim on any policy taken out *after* your wife's bankruptcy order (i.e. now) so she may as well get another one. Otherwise the OR will know that you've not bought the old policy off them and will therefore claim this surplus on an IPA.

74leeboy

SkintSquaddie said:

74leeboy said:

Just a quick update. The OR has claimed interest in the life insurance policy and any payout half would go to the OR. 
So we have cancelled the policy and will set one up after bankruptcy, but still save the payments into a savings account. 

Would the OR not want access to the savings or failing that the money you would have been paying into your life savings will now become surplus in the OR's eyes as you will have to inform them that you have cancelled the policy anyway

It's my wife's bankruptcy but I pay the life insurance. Should have said that first