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Can I cancel the joint life insurance now that we are divorced?

(21 Posts)
bella1968 Mon 11-Apr-16 14:00:56

Hi, I need some legal advice and can't afford to pay anymore money to a solicitor. My ex husband and I have joint life insurance and still own a house together. The life insurance was taken out on a decreasing value because of the ownership of the house. I don't want to have anything to do with him so I'd like to cancel this joint life insurance and set up my own but wanted to know if I should wait until the house is sold. What will the repercussions be if I cancel it now whilst we still own a house together?

I wouldn't want any money to go to him in any case but would want it to go to the children, I don't want anything to do with him and certainly wouldn't want him to benefit.

Any advice would be appreciated. Thanks.

Eustace2016 Mon 11-Apr-16 15:17:40

It is almost certainly a condition of your mortgage that you have life insurance and if you each obtain similar cover separately (if your lender agrees) will cost you both more so I would suggest it may be best to keep it.

If the policy might pay out more than paying off the mortgage then you should make sure you change the beneficiary - I made sure all such policies were on trust for the chidlren so they are not included in your estate for inheritance tax and taxed at 40% - the lenders have standard forms you can complete.

bella1968 Mon 11-Apr-16 16:20:37

thanks Eustace2016 looks like I'll have to wait until we sell the house and then cancel although I'll check with the mortgagor.

kittybiscuits Mon 11-Apr-16 16:22:30

If he dies before the house is sold it will pass to you, if that is the basis of the insurance and mortgage wink

bloodynoris Mon 11-Apr-16 16:25:09

You haven't got to have life insurance for your mortgage. Bearing in mind you are now older so it cost you more but you have 3 options. 1 staying on the same cover. 2 you can phone up the provider and they should be able to remove just your self and set you up on a single policy. 3, you both cancel and both start new cover with any provider. If you want any more information I will try and help you.

Eustace2016 Mon 11-Apr-16 18:42:12

Some lenders require life insurance so that if you die the loan is paid off. We even had the life policy company named on our mortgage schedule.

HeddaGarbled Mon 11-Apr-16 23:32:25

You could ask the mortgage lenders rather than paying a solicitor.

Rockchick1984 Tue 12-Apr-16 07:33:37

Just to clarify - lenders cannot insist on life insurance as a condition of the mortgage, although they can recommend it. The only insurance they can insist on you having is buildings insurance, and even then it doesn't have to be with them, it can be elsewhere.

Eustace2016 Tue 12-Apr-16 07:57:26

Do you know what rules say that they cannot insist on it? We have always been forecd to take it out but it may have been a change in the last few years. It seems an unusual change as lending rules nad protection for banks and other lenders are stricter on the whole not looser so that is why is surprises me.

Yes, no need to go to your solicitor about changing beneficiaries for life policies. The lenders have trust forms and you can change those. I changed mine from my then husband to the children when we divorced.

Follyfoot Tue 12-Apr-16 08:25:16

We havent had to have a life policy for our last two mortgages (going back 11 years). They cant insist on it as has been said above. One thing to bear in mind is that a life policy bought some years ago might be cheaper than if you start a new one now as obviously you are older so the likelihood of you dying is higher.

titchy Tue 12-Apr-16 09:27:36

I think you'll find the likelihood of dying is exactly the same now as it was a few years ago.....!

bella1968 Tue 12-Apr-16 09:48:53

thanks for all your answers. I have already contacted the insurers, the cost depends upon whether you want a decreasing amount that you are insuring for or whether a stagnant amount, I found that it was basically the same amount each month for just me. I'm still thinking about what to do, but I will investigate changing it so that if I die then the money goes to my children although I am hoping that the house will sell soon. I will also investigate whether my mortgagor requires me to have life insurance.

Rockchick1984 Tue 12-Apr-16 09:53:20

Eustace until recently I was a mortgage adviser, the reason they can't insist on life cover is that it's a secured loan so if you died then the property can be sold to repay the mortgage. Buildings insurance is essential as if the property burnt down (for example) and you stopped paying the mortgage then there is no property for them to repossess to recover their mortgage.

Eustace2016 Tue 12-Apr-16 12:01:03

I see. I think it's changed since we took out our mortgage then. About 2 years ago I wanted to cancel my life cover and I read the mortgage and I HAD to keep up the policy up but it looks like they have changed for newer loans.

Eustace2016 Tue 12-Apr-16 12:01:48

Mind you life insurance is very sensible particularly if you hvae a dodgy marriage or might divorce. Plenty of people forget during divorce proceedings to insure the life of their soon to be ex who then dies and they are left high and dry either without the maintenance or without a spouse to care for the children.

Micah Tue 12-Apr-16 12:08:11

Out of interest can you insure an ex to pay out to you if he/she dies?

I've always thought it would be sensible to insure against the loss of someone whose income you rely on to provide for your children. I've always wondered how many rp actually do.

Kind of follows on from the LB inheritance discussion- do you expect provision from your ex's estate if you don't insure?

zipzap Tue 12-Apr-16 12:30:56

I seem to remember from other discussions on here that if you want to change the beneficiaries of your policy then you should be able to ring them up, tell them and either confirm in writing or they'll send you a form to fill out that will confirm it (the phoning is essentially to check if you need to just write or if they have a special form).

Obviously you still need to keep the mortgage side of things sorted for now - but you should be able to change his name to your dc for if there is any extra left over...

And I don't think it should cost much, if anything.

The other thing to think about is making sure you have your will done - to make sure that nothing can go to your exH. Assuming you have already divorced but in case you are still waiting for it to be finalised then you're still married and your assets would go to him** if you haven't written a will or have an old one from when you were still married.

** Up to a certain amount, then dc get some too, if you're intestate. Won't claim to be an expert and that's an incredible over-simlification but you get the gist!

Follyfoot Tue 12-Apr-16 21:43:59

Think its a fixed term decreasing cover policy Titchy, so I should have said the likelihod of dying within the term grin oops. Obviously the likelihood of death overall is as you say - unfortunately - unchanged (oops on my part).

Eustace2016 Tue 12-Apr-16 21:45:53

If you are changing beneficiaries of a trust I would always think it shoudl be in writing. I would not rely on a phone call to the life company.

And yes you can insure anyone's life. People insure the life of their business partner against death, just about anyone who you might lose out if they die. It is a good idea to take out life insurance over an ex if they are paying you maintenance or owe you money.

SanityAssassin Wed 13-Apr-16 10:24:58

Eustace I have had various mortgages for over 25 years and have never held life insurance. If I died/was too ill/ unable to pay l then they would repossess the house to recover their money

BlueStringPudding Thu 14-Apr-16 21:25:24

I divorced exH about 14 years ago, and as part of the divorce settlement he signed the endowment policy over to me. He had to write to confirm to the Insurance company, and then they updated the policy holder information.

I continued to pay the premiums, both our lives were ensured, but when the policy matured, only I received the payout.

It is a much better approach than cancelling the policy I think.

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