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Original poster

A question about life insurance for someone in this situation please?

31 replies

WhyEffingBother · 25/08/2023 19:18

Amy is single, never married and has no children. No intention or expectation of any of this ever changing. She owns a home (mortgaged), a car outright and has a pension.

She does not have life insurance. Her only immediate family are her parents, both on income support with no money.

Am I right in thinking in the event of Amy's (touch wood) death her assets will automatically go to the parents? Should Amy be taking out life insurance for the sake of her parents? Funeral costs etc?

OP posts:
Original poster
WhyEffingBother · 25/08/2023 19:43

Anyone?

OP posts:
AvengedQuince · 25/08/2023 19:47

When I was writing my will I was told assets would go to my parents in the event that my child predeceased me or something happened to both of us. The will would override that (I nominated my siblings after my child, so bypassing parents).

dementedpixie · 25/08/2023 19:49

Would she not need life insurance to cover the mortgage if its not yet paid off? What other assets would she have?

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MissConducUS · 25/08/2023 19:50

It's always worth having a will, even without dependents. The legal process to wrap things up will be much simpler and quicker.

Generally, you only need life insurance if someone else is dependent on your income.

Spirallingdownwards · 25/08/2023 19:50

Amy should still make a Will to assist administration of her estate. Yes if there aren't savings available to pay for the funeral a small life assurance policy may be sensible if the parents aren't able to afford on and be reimbursed from the estate later.

Original poster
WhyEffingBother · 25/08/2023 19:50

dementedpixie · 25/08/2023 19:49

Would she not need life insurance to cover the mortgage if its not yet paid off? What other assets would she have?

She wouldn't give a shit about the mortgage. She'd be dead.

OP posts:
MissConducUS · 25/08/2023 19:51

WhyEffingBother · 25/08/2023 19:50

She wouldn't give a shit about the mortgage. She'd be dead.

Show quote history

Correct. The house will be sold by the estate, and the proceeds will pay off the mortgage.

TidalShore · 25/08/2023 19:52

dementedpixie · 25/08/2023 19:49

Would she not need life insurance to cover the mortgage if its not yet paid off? What other assets would she have?

Not if the mortgage is less than the house value. It would be sold to repay the mortgage. If there was still a shortfall the bank would be after any other assets in her estate. And even if there still was not enough to cover the outstanding mortgage amount, tough luck on the bank!

TidalShore · 25/08/2023 19:55

However if the parents lived with Amy life insurance would then be sensible to pay off the mortgage so they are not left homeless.

Blondeshavemorefun · 25/08/2023 19:57

It's says wise to have life insurance. Amy is young. Won't cost a lot each month

Be awful if she died soon. Mortgage wasn't paid off so house be sold and say didn't pay off the mortgage

She also needs a will. To say where house will go say if her parents die first

After dh died I changed my will to say house be shared between my two best friends as my brother and parents didn't need it

Obv changed it now mini blondes is here

Friend is like Amy. Has no children or partner but does have a sister

So her house will go to her nephews as her sister /parents don't need it

Original poster
WhyEffingBother · 25/08/2023 19:59

The parents have their own secure home. The house would be sold and equity goes to the parents, the car would be sold and profit to them, the pension would go to them and savings account would go to them. The funeral will be paid for by all of this, so I'm assuming at the very worst the parents can receive some sort of grant then pay it back from the estate when it gets wrapped up?

OP posts:
Original poster
WhyEffingBother · 25/08/2023 19:59

If the house was sold the mortgage would easily be cleared.

OP posts:
Loverofoxbowlakes · 25/08/2023 20:02

dementedpixie · 25/08/2023 19:49

Would she not need life insurance to cover the mortgage if its not yet paid off? What other assets would she have?

The lender would sell the house to discharge the mortgage, and equity would go to the beneficiaries.

No need for life ins in these circumstances.

TidalShore · 25/08/2023 20:02

They can use the estates funds to sort probate, funeral, etc. They just need to keep records. That's assuming they are executors. If no, they don't need to do or pay anything.

chipsandpeas · 25/08/2023 20:08

there might be a payout from her pension or life insurance through her work

i dont have life insurance, never needed it even when i had a mortgage, if i died then the house would be sold

greglet · 25/08/2023 20:17

@WhyEffingBother why "Amy's (touch wood) death"? Are you okay?

Original poster
WhyEffingBother · 25/08/2023 21:05

greglet · 25/08/2023 20:17

@WhyEffingBother why "Amy's (touch wood) death"? Are you okay?

All good. Just wanted opinions :-)

OP posts:
Toooldtoworry · 25/08/2023 21:10

I work in this area. Amy has no requirement for life insurance, and as such shouldn't bother getting any.

Amy's greatest risk is long term sickness though, so Amy should consider some income replacement to cover mortgage/bills.

Original poster
WhyEffingBother · 25/08/2023 21:18

Toooldtoworry · 25/08/2023 21:10

I work in this area. Amy has no requirement for life insurance, and as such shouldn't bother getting any.

Amy's greatest risk is long term sickness though, so Amy should consider some income replacement to cover mortgage/bills.

But what if Amy dies and her parents don't have the cash upfront to pay for the funeral?

OP posts:
PauliesWalnuts · 25/08/2023 21:26

Funeral directors will usually wait as long as whoever is dealing with probate can prove that there are assets (even if not liquid) that will eventually pay for the funeral. Our probate solicitor paid for my dad’s out of the estate as we were young and didn’t have the funds.
If Amy has a death in service benefit as part of her pension this can usually be paid out fairly soon after death I think, partly to pay for funeral expenses.

Toooldtoworry · 25/08/2023 21:35

WhyEffingBother · 25/08/2023 21:18

But what if Amy dies and her parents don't have the cash upfront to pay for the funeral?

Show quote history

Amy has savings. Most banks will pay a funeral director from them upon receipt of a death cert and bill from FD.

madmumm · 25/08/2023 21:36

Going through a similar situation at the moment. When contacting bank accounts of someone that has died very recently via online forms, it gives the option to repay funeral directors or florists costs directly from the account. Obviously they need an invoice to pay it directly, but this gives a bit of reassurance.

Toooldtoworry · 25/08/2023 21:37

PauliesWalnuts · 25/08/2023 21:26

Funeral directors will usually wait as long as whoever is dealing with probate can prove that there are assets (even if not liquid) that will eventually pay for the funeral. Our probate solicitor paid for my dad’s out of the estate as we were young and didn’t have the funds.
If Amy has a death in service benefit as part of her pension this can usually be paid out fairly soon after death I think, partly to pay for funeral expenses.

As long as Amy dies whilst still paying into work pension DIS will be paid very quickly to nominated person. Doesn't usually wait for probate.

Original poster
WhyEffingBother · 25/08/2023 21:37

Thanks everyone I really appreciate the answers. All makes total sense x

OP posts:
Wazzzzzuuuuuuup · 25/08/2023 21:38

Does Amy have any death in service benefits related to her occupational pension. These often pay quite quickly