Endowment policy in different name to property owner.

qfk123

Grandad has a House/ Property in his name with a interest only mortgage -The linked Endowment policy in the name of my late father - Insurance have paid out the endowment policy to my mum on dads passing and want to use the funds to pay off the mortgage on the said property.

Any issues with this when we approach the bank given that the link endowment policy has already paid out. I have power of attorney and registered to deal with mortgage matters for grandad.

qfk123

Any info or quick suggestion would be helpful - it may not be a problem having a linked endowment policy to a mortgage that the mortgage holder was not the beneficiary, but just wanted to clear up any red tape or problems i may have when i speak to the lender.

dunstonh

Was the endowment assigned to the lender? If so, then the lender gets the money regardless of who the policy owners are. Anything left over after the mortgage is paid is then paid to the policy owner.

If its not assigned to the lender, the funds are paid to the owner and the owner can choose what to do with it. That can be pay the mortgage or blow it on something else. If the owners are deceased, it is paid into their estate and the value is used to clear debts before distribution by the executor. If the policy is in trust it would be different but you wouldnt expect a mortgage endowment to be in trust.

*MF*

I can't see a problem - seems straightforward - if within your family circle there are now funds available to pay off the mortgage, and that is what you as a family have decided to do - then I cannot think of a problem coming from the bank.

(... and they seem to need the money these days)