Life Insurance related question

rach83

Just wonder if anyone can help me with this I hope I have posted this in the right section. I own a property with my partner (we are not married but have been together for 3 and a half years, in the property together 2 and a half years). We have a mortgage of £90,000 and we have level term assurance. I am pretty certain when we brought the property that the arrangement was set up as "joint tenants in common" which to my knowledge means that we own half the property each and if anything was to happen to one of us the other half would automatically own the other share of the property and the life insurance would pay off the whole sum outstanding on the mortgage. I am 99.9% certain that is the case but I sadly lost my uncle a couple of months ago very suddenly at 43 and since then this has been playing on my mind. Should I write to the solicitor who dealt with the conveyancing on the property when we brought to get this confirmed?

dunstonh

The life cover is totally independent of the mortgage. A joint life policy will pay the proceeds to the other joint party unless the policy has been written in trust to say otherwise. It is highly unlikely a trust document would have been written up in the case of a term assurance covering a mortgage.

rach83

Thanks for your reply - its more about the ownership rights I need to clarify then.....

dunstonh

Your have the lives assured and you have the policyholders. The policyholders are the owners of the policy. Assuming joint life as you said, the owners and lives assured are the same, then the other policyholder receives payment on death. Placing the policy in trust would overide that with the beneficiaries named being the ones that get the payment. However, the owners still remain as the policyholders.

Bit of tongue twister that

Savvy_Sue

Although there might also be insurance relating specifically to the mortgage, depending on what kind of mortgage it is?

My understanding is that with level term assurance the money goes straight to the beneficiary, unless as already said it's been put into trust. The beneficiary can then choose what to do with the money - pay off all the mortgage, reduce the mortgage, spend it on the funeral, whatever.

But if you have a joint endowment mortgage then normally there is insurance with that which specifically pays off the mortgage if either party dies.

Someone more knowledgeable will correct me if I'm wrong, which may then give you another question - what kind of mortgage is it!

dunstonh

But if you have a joint endowment mortgage then normally there is insurance with that which specifically pays off the mortgage if either party dies.

Endowments used to get assigned to the lender but that stopped happening, more or less across the board, around 8 years ago. Old policies may still be assigned but it is easily removed if required.