Life insurance on another's life

TheYoda

Decades ago, my father took out a life insurance policy on my mother (for a few hundred pounds).  The policy was to pay him in the event that she died (to help look after any children).  Years later, it became a paid up policy meaning there are no more premiums to pay.  He has died now and she was the beneficiary of his estate.  What happens to the policy?  Any help would be useful before I contact the insurer.

tacpot12

It looks like this might depend on whether the policy was written in trust or not. If it was written in trust, then the terms of the trust will determine who will inherit the policy. If it was not written in trust, then its ownership passes to your mother under the terms of your father's Will. Just when she dies, it should payout to her estate, and can be distributed according to the terms of her Will.

You need to call the insurance company to check whether the  Will was written in trust (Your father's executor needs to do this). You can also ask them to update their record of who the owner of the policy is at the same time. It seems unlikely that the policy would have been written in trust, but  you  never know. 

TheYoda

That's really helpful, thanks.

kingstreet

Please clarify, who is the life assured (the person on whose life the cover was effected) and the assured (the person to benefit from the policy in the event of the death of the life assured?)

FWIW - it could have been set up on a Life Of Another basis which means father could be the assured with mother as life assured which is the usual meaning of "my father took out a life insurance policy on my mother" in which case he would receive the benefit on her death.

Alternatively, if he took out a policy on his life the benefit would pass into his estate and be distributed according to his will or if written in trust the trustees would distribute the funds according to the trust (eg to named individual beneficiaries) or to a class of beneficiary (eg my children both legitimate and illegitimate at the time of my death.)