Cashing in a recently discovered life insurance policy

SE13

My husband was recently contacted by a life insurance  company to say he has an old policy he took out over 50 years ago and offering him the chance to cash it in. It is worth several thousand pounds but our circumstances make it not  straight forward.We are living on a state pension and receive housing benefit and pension credit and not sure if they would be affected.
When we first received the benefits we had around £9000 in savings which was declared. We deferred our state pensions and took lump sums which do not count towards benefits and all this money was put into one savings account. Over the years the £9000 has been used up but we still have a large sum of the deferred pension left but cannot prove which was savings and which was from the pension as it is all in the one pot.We do not want to lose the benefits so how do we claim this life insurance money and prove we are still under the amount allowed for the benefits.In savings we are but the deferred pension money makes it look like we are well over the amount allowed so not sure how to proceed.  

marcia_

SE13 said:

My husband was recently contacted by a life insurance  company to say he has an old policy he took out over 50 years ago and offering him the chance to cash it in. It is worth several thousand pounds but our circumstances make it not  straight forward.We are living on a state pension and receive housing benefit and pension credit and not sure if they would be affected.
When we first received the benefits we had around £9000 in savings which was declared. We deferred our state pensions and took lump sums which do not count towards benefits and all this money was put into one savings account. Over the years the £9000 has been used up but we still have a large sum of the deferred pension left but cannot prove which was savings and which was from the pension as it is all in the one pot.We do not want to lose the benefits so how do we claim this life insurance money and prove we are still under the amount allowed for the benefits.In savings we are but the deferred pension money makes it look like we are well over the amount allowed so not sure how to proceed.  

Lump sum payments do count towards benefits! 

SE13

State pension  lump sums do not. We declared everything and were told by housing benefit and  pension credit it does  not count as we claimed under the old state pension system.