# Life Insurance beneficiary



## danash (9 Dec 2008)

Hi - I am separated from my wife but maintain several joint life insurance policies on property with my ex wife. 


Question is if she dies am I automatically the beneficiary as the second life insured or do we have to go through all the probate issues ? 

I would not expect my wife to willingly leave any funds to me from other parts of her estate but was wondering if these funds are ringfenced from her will ?

We were legally married and have an informal separation agreement that does not address this point. We are likely to divorce next year.


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## NorthDrum (12 Dec 2008)

You have several joint life assurance policies on a property or properties? 

Either way, life policies on properties usually payoff mortgages in the event of the death of one partner. The remaining monies goes to the dead persons estate. This is assuming that your life policies are assigned to mortgage companies.

So in answer to your question, no I do not think (but would get this legally clarified) that you are automatically entitled to be the beneficiary of these policies in your case (upon legal seperation).

Alot will depend on what agreements (if any) were made on seperation and whom your ex wifes beneficiaries are, or in your case alot should be clarified on your seperation.

After your legal seperation I would of thought that you and your ex wifes properties and life policies are similar to that of two friends whom bought a property together.

*Im not a solicitor* and wouldnt presume to have the answers to your query in full, I just wanted to clarify the usual process applied to life assurance policies when a partner dies.


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## danash (15 Dec 2008)

The policies are currently assigned to mortgages on two properties. We each live in one property and they are currently in joint names. We are in the process of splitting the mortgages and and putting them in single names.

If it goes as you describe - and that makes sense - then the policies would clear the mortgages on a property I have no cliam to and my wife would be in a position to leave it to whoever she wants.

What I probably need to do is to cancel the assignment when the mortgages are split and require her to arrange separate life cover for her new mortgage.

I am assuming then once I clear the assignment that I would be the beneficiary ?


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## NorthDrum (18 Dec 2008)

danash said:


> The policies are currently assigned to mortgages on two properties. We each live in one property and they are currently in joint names. We are in the process of splitting the mortgages and and putting them in single names.
> 
> If it goes as you describe - and that makes sense - then the policies would clear the mortgages on a property I have no cliam to and my wife would be in a position to leave it to whoever she wants.
> 
> ...


 
Bare with me, Just trying not to get confused ! 

If you have a joint life policy with your ex-wife and it is assigned to a mortgage provider. Should something happen to either of you, the mortgage is paid off and remaining balance goes to your estate.

If you have a joint policy with your ex-wife that is not assigned (not sure why you would want this, not being smart but there maybe legal reasons why you may be required to have this). I assume the monies goes to the estate (your ex-wife should of made up a seperate will at this stage). There may be a requirement under your seperation terms that you have a life policy (if you have children etc) for one of a number of reasons.

The assignment relates to who is the policy beneficiary in the event of a claim being made. Do you have an insurable interest in your ex wife outside of a mortgage (ie if your ex wife dies, how does this impact on you financially.).

If you think about it, when you are fully split from your wife, technically having life assurance on her would be like me having life assurance on a random woman who I know. (just trying to put your case into perspective).

Please understand, I am not a solicitor so I am just trying to give you a better understanding of the life policies.

I have never been involved in a seperation but for anybody who I know thats split from their partner, the best way is by splitting and parting ways as much as possible (ie draw a line and seperate everything). I would advise that you do not cancel any policy until you have a replacement one in force (just for yourself).


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## upport (18 Dec 2008)

Joint life policies are jointly owned and the survivor inherits life cover directly as joint owner.If policy is assaigned to a lender,loan balance is cleared on death and any surplus life cover is paid to the surviving joint life assured.Insurable interest is only an issue at time of setting up a policy.


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## NorthDrum (19 Dec 2008)

upport said:


> Joint life policies are jointly owned and the survivor inherits life cover directly as joint owner.If policy is assaigned to a lender,loan balance is cleared on death and any surplus life cover is paid to the surviving joint life assured.Insurable interest is only an issue at time of setting up a policy.


 
My definition of Insurable interest was more relevant to somebody looking to take out cover with their ex partner. Once there was an insurable interest when the policy was taken out then they should pay out on the claim.

Whether or not any agreements in divorce proceedings affect the payout could be another issue that I wouldnt be familiar with.

I suppose its a question of whether or not you want to continue having Life policies with your ex Wife. Many people either let the policies lapse or they take one of the names off the policy or simply setup their own seperate life assurance.


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## danash (22 Dec 2008)

NorthDrum said:


> My definition of Insurable interest was more relevant to somebody looking to take out cover with their ex partner. Once there was an insurable interest when the policy was taken out then they should pay out on the claim.
> 
> Whether or not any agreements in divorce proceedings affect the payout could be another issue that I wouldnt be familiar with.
> 
> I suppose its a question of whether or not you want to continue having Life policies with your ex Wife. Many people either let the policies lapse or they take one of the names off the policy or simply setup their own seperate life assurance.


 

I do have an interest in continuing these policies after the separation of the mortgages as we have two children and I would like(either of us) to be financially secure on the death of the other.

I have done some checking - it seems that after our last refinance our bank did not take out an assignment on the policies. That means that the pricinciple of paying out to the joint life insured would seem to come into force.

I cannot secure further life insurance due to medical considerations so I cannot cancel any policies and take out new ones.

My real concern was initially that if we split the mortgages and each house was in only one name ( with policies assigned to mortgage companies ) the payout would effectively clear a mortgage on a property I had no legal claim to. I would be at the mercy of her will and the succession act to ensure she made adequate provisions for my children for what is in reality an asset we jointly created.

Her family are very money conscious and I have no doubt there would be many claims on her estate so I just want to make sure it goes to my children and not to obscure relatives.


As the policies are not assigned it seems to be clear that I will be the beneficiary as the joint life. There are reciprocal benefits to her obviously and I have additional single life policies with no nominated beneficiaries - must get that sorted !


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