Life Insurance

[Squickety]

DH and I are married, and he has a minor child from a previous relationship. We've never bothered with life insurance but for various reasons we now need to take out a life insurance policy on each other (to cover the mortgage), but I've read that his ex could claim against it on behalf of his child in the event of anything happening to him, is this correct? There would be very little else in the way of his estate (house in my name). I'm loath to take out a policy where the proceeds would not do what it was supposed to do in the first place i.e. cover the mortgage! I can't find much about this on line at all, does anyone know more about this please?

If he didn't leave sufficient provision for his child to cover maintenance then yes she could claim from the estate.

Why can't he take out extra life insurance to cover mortgage and maintenance?

Yes that’s correct she could do. Do you have wills? You both need them... this is the place to then allocate an amount of money to his DC to cover maintenance until he/she turns 18.
You then need to allocate some estate to her/him as well in the event of death to prevent more claims against the estate

We’ve got various forms of life insurance, one through our employers that pays £120k for death in service to the spouse. One that covers our mortgage in the event of death. And one that pays a substantial lump sum out to the other party in the event of death as well. We have wills, that all have clauses in regarding his ex. DSS and all DC subsequently are allocated an equal share of the estate in the event of death of either one of us.

Payments can be made under a life policy either to the estate of the deceased or to a third party. If it's to a third party it doesn't fall in to the estate. So as you will receive the payout in the event of his death it will not fall in to the estate.

A joint policy would be payable to you, not his estate. Similarly if you own a policy on his life, or it is put in trust, no claim could be made.

If a policy is taken out in his sole name, with no other owner, it will be payable to his estate upon which she can make a claim.

If you take out a policy (I.e on your life), it pays out if you die. So you (personally) are not taking out and paying for a policy that your H's ex can claim against.

Thanks all. It was a joint policy we were thinking of so it sounds like that might be the way to go to keep it out of the estate. DH will make separate provision for his DC. And namechanged the premiums will come out of joint money so yes I will be contributing towards any policy we take out regardless of who it's on / for / covers!

I didnt realise you meant joint cover - apologies!