Critical illness payout after divorce and possible impact on Universal Credit

[Catlover19]

Hi I'm looking for some advice, I've been divorced for 2 months. Two weeks after our divorce my ex found out he had stage 3 bowel cancer.
When he moved out last year I carried on paying the critical illness cover as due to health issue and age I couldn't get a new policy. I suggested he made a claim on the policy as his name is still
on it but I've been told that due to our divorce legally the payout will be 50:50.
I'm a working single parent and worried if I refuse the money so my ex gets it all I could loose my UC as I'm depriving
myself of capital. Im not sure what to do I can't afford to loose my UC. Thanks

Paying off debts is not deprivation of capital. Pay off your credit cards or put it towards your mortgage.

I have life insurance to cover my mortgage but couldn't get critical illness cover that's why I carried on with existing policy but it finishes when a claim is made so I will no longer have critical illness cover.
Happy to cancel my UC claim if I receive the money. My ex does not pay child maintenance as when we sorted out finances he took less money in the split so I could get a mortgage and he does not pay maintenance. The children are late teens, so wouldn't have been paying long term

You dont cancel the UC you just declare the savings and update it monthly with what youve spent it on until its below 6k

Oh gosh that’s really tricky then. What does your ex think?

I would get legal advice. Usually a joint policy pays out the sum insured for when one person claims and the cover then ends. If they’re only paying out half the sum insured for they should continue to cover the unaffected partner (effectively splitting a joint policy into two single policies). They can’t take a premium for the full sum insured and then only pay half and also cancel the cover. I’d double check what you’ve been told and, assuming that’s definitely what they’re saying, seek legal advice because they aren’t providing the cover you paid for.

Take the money and pay it off your mortgage.

Pay off the mortgage then you are allowed to do this under the UC regs

it is common for critical illness policies to end on the first “event”. The original plan would be for it to pay off their joint mortgage when the first of the couple got critically ill. The complication here is that she didn’t remove ex dh from the policy on divorce and carried on paying the premium herself. The full sum assured is being paid due to his illness but it is now split 50:50 between the parties as they are divorced but they are both policy owners.

@Focalpoint thank you - for some reason I completely misread it as the policy was only paying 50% in total. Reading for comprehension was clearly lacking on my part.

If you use the capital to reduce your mortgage then it would not be deprivation.

Could you not use your 50% to pay off mortgage so it’s not classed as deprivation of assets - explain to ex this is to safeguard children’s assets for future. If he’s ill maintenance payments from him msy stop.

If you send them 4 months statements now then the money will not be in your bank yet.

Also there are many ways you can legitimately use the money without it being DOA. Do you have any loans or credit cards? Pay them off.
You can pay for household repairs or refurbishment. Need a new boiiler or heating. New fridge, freezer or essential household goods?

If you are needing to move house because of the divorce it can be used for deposit, removal expenses etc.

Do check with the insurer whether they offer any sort of continuing CI cover for you - years ago when I worked for L&G some policies had a replacement cover benefit which would allow the other policyholder to continue a single policy on the same terms and with reduced underwriting. Long shot but worth checking.