Insurance Policy Premiums - Changing Direct Debit Payments To Be Paid By Others

ppeetteerr

Hello,
My wife and I have a joint Lifetime Insurance policy which is set to pay on 2nd death and  which we pay the premiums by Direct Debit.

This is expensive so our children have offered to take over the payment of the premiums.

Can you please confirm that it would be legal and proper (and would not change/effect the policy) by us cancelling our Direct Debit payments and they would set up new Direct debit payments to replace.

Regards.

dunstonh

Can you please confirm that it would be legal and proper (and would not change/effect the policy) by us cancelling our Direct Debit payments and they would set up new Direct debit payments to replace.

Because of electronic notifications, if you cancel the direct debit at the bank, the insurer will be aware of it within 24 hours.    So, that would trigger warnings.   Usually you could complete another mandate and as long as its done quickly, its not a problem.   

Alternatively, you can get the mandate from the insurer, complete it and ask them to redirect it to the new account and then cancel it when completed.   Or get the alternative payer to make a standing order payment to your account to arrive before payment date.

ppeetteerr

Thanks for the info, but just to confirm, is it legal have family members take over the premium payments from the
policy holder/current premium payer.
Regards, 

dunstonh

ppeetteerr said:

Thanks for the info, but just to confirm, is it legal have family members take over the premium payments from the
policy holder/current premium payer.
Regards, 

There is no issues over legality.   However, there are potential consequences.  Small premiums are exempt from anti-money laundering checks.  Large premiums are not.  So, ID may be required.

If the account holder dies or gets into money problems, the premiums could go unpaid and the cover gets cancelled.  Or they may stop paying and pocket the money.

Hence the other party paying a standing order to your account may be a lot easier.