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Life insurance policy after bankruptcy

4 replies

Wecouldbesohappybaby · 13/02/2021 12:11

Does anyone have any knowledge they can share please? My aunt has recently passed away, she was previously bankrupt but discharged in 2013. The Insolvency Service acted as trustee and they applied for and were granted release from trusteeship in 2016. My aunt had a number of small life insurance policies, all taken out prior to her bankruptcy: I have no idea if she bought back the interest in the polices from the trustee and am waiting to hear back from the insurers about this.
My dad is next of kin and was hoping to use the money from the polices for the funeral costs however I think that if my aunt did not buy back the interest in the policies then her creditors have first claim on the money. I'm encouraging my dad to speak to a solicitor for help/ advice but until then, are any of you wise MNetters able to throw any light on the situation please?
Many thanks.

OP posts:
RedHelenB · 14/02/2021 08:39

They may well have been left to her if they weren't for significant amounts. Only likely to be bought back if they were the endowment type.

Wecouldbesohappybaby · 14/02/2021 09:00

Oh really? I had no idea that was a possibility. A couple of them were less than a thousand pounds, the largest was around three thousand. They're the 'over 50s', no cash-in value sort of things. I'm hoping it won't be long until we hear back from the companies with a decision one way or the other.
Thank you for your reply, much appreciated.

OP posts:
RedHelenB · 14/02/2021 09:40

If there's no cash in value I'm almost certain they'll be fine. In bankruptcy you're allowed reasonable expenses before they take from your savings so as long as the premiums have been kept up you should be fine.

Wecouldbesohappybaby · 14/02/2021 09:59

Fingers crossed then. She had to surrender her £2 of Premium Bonds which is why I was so certain they'd have the insurance policies too, although I suppose the bonds would have been worth something if they'd won.
Again,thank you so much for taking the time to reply.

OP posts:
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