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Legal matters

Assignation of life assurance, and divorce, advice please.

14 replies

RedRosy · 16/01/2013 09:23

Hi
When my H and I separated I left the family home, with my DCs, to live closer to my family, and he is buying me out of the house. He wants me to assign the life assurance which is in joint names to him. It is a death or terminal illness policy with no surrender value. There are 2 policies - one to pay off the outstanding mortgage, and the other a lump sum.

Whats the usual situation in these matters? I feel a bit uncomfortable knowing he would get a large lump sum if I die, or get a terminal illness, but also am aware it may be in the kids best interests.

Any advice please?

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Collaborate · 16/01/2013 10:07

Who is paying the premiums? Have you already got a financial order in divorce? Would you want/need to insure his/your life after divorce? Who would receive the payout on death at present?

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RedRosy · 16/01/2013 11:44

Currently my ex is paying the premiums, I was unaware of the policy, as he took care of the finances. At present he would receive payout at my death at present, and vice versa. He's buying me out of the house, but at present I'm still on the mortgage. I will need life assurance when I get a mortgage of my own, but am currently staying at my parents house. We have 3 DCs aged 2,4, and 6.

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crazygracieuk · 16/01/2013 12:09

We are divorcing and have life insurance to cover each other's death. If I die h would look after the kids and would need to money for a nanny etc.

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Collaborate · 16/01/2013 13:37

OP: Do you have a money order in place within the divorce?

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Sam100 · 16/01/2013 13:44

I would also consider him having a policy that pays out to you in event of his death. My friend's dad died unexpectedly when they were still young teenagers but after their mum and dad had divorced leaving the mum in dire financial straits as their settlement had been based on him paying monthly maintenance which would then pay the mortgage that she took on. He died suddenly and she nor the children were not named in his will as he had left everything to new gf, clearly no one had considered the possibility that he might not be around to make maintenance payments while there was still a mortgage on the family home.

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RedRosy · 16/01/2013 17:20

Collaborate, I'm not sure what you mean by a money order. the agreement states I get monthly maintanance for the DCs, and a one off payment for my share of the house.

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Collaborate · 16/01/2013 20:37

I mean a court order dealing with the money stuff - house etc. you mention agreement. It's really important that you're clear on whether or not you have a final order or not, as that will affect what you can do.

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RedRosy · 18/01/2013 07:31

Hi, no court order as yet. We are at the late stages of signing the separation agreement. We are agreed on everything except the life assurance. I suggested I could assign the reducing term one, and we could keep on the lump sum one as is. My solicitor said she couldn't advise on this and suggested I speak to an IFA.

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Collaborate · 18/01/2013 11:07

You need to have a think aboout the life cover you would like after divorce (your life and his) and cost that. What is cheaper - the current policy or any new policy? Is the difference in cost worth falling out over?

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RedRosy · 18/01/2013 13:16

Thanks Collaborate
Is it common to just continue the policies as stands? Why would he want me to assign them to him, if its important that we cover both of us for the sake of the kids? Once divorced surely I can't take out life assurance in his name?
Many thanks, by the way.

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Collaborate · 18/01/2013 13:50

Why should he pay, post divorce, to have a policy that pays out to you on his death? And vice versa. You'll need your life insuring if you get a mortgage. If he dies it would be good for you that you get a payout in lieu of future chuld maintenance.

You can agree what you want, but before you argue over it speak to an IFA about the cost of replacing these benefits. It's generally cheaper to insure a life when younger.

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Collaborate · 18/01/2013 13:51

You should be able to insure his life after divorce. Speak to the IFA about this.

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digerd · 18/01/2013 13:52

I'd contact the insurance company and ask them what it would mean - what effects it would/could have on you.

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RedHelenB · 19/01/2013 20:19

I think your friend could have challenged the will Sam as the children were his dependents.

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