Life Insurance

[Scrooge]

At the moment we are paying into Term Life Assurance - in the event of a payout during the course of our IVA there would be enough money to cover the total amount of the IVA but not enough to cover our original debt.
Would the entire amount of payout be taken towards our ORIGINAL debt or only the amount needed to finish the IVA??
Bit morbid I know and neither of us intend to go quite yet!! But we are wondering if its worth carrying on paying the monthly premiums during the course of the IVA as it sort of seems we are just in effect paying IVA insurance?
Can anyone help to clarify the position?

[MelanieGiles]

The whole amount paid out would be required to pay off the debts, but it might be possible to offer a settlement based upon the original amounts offered, depending upon the circumstances of the surviving party.

As your commitment to the IVA must be to keep doing the best by your creditors, it would seem sensible to continue to make the payments.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Scrooge]

Thanks Melanie - There is no legal requirement to have life cover during an IVA then?
As we are really struggling to maintain our IVA payments now it would seem preferable to cancel the policy and use the spare cash to help with the payments.

[MelanieGiles]

No legal requirement at all. But do be sure that you are doing the right think by cancelling the policy, and take expert advice from a financial advisor.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Andrew Graveson]

Hi Scrooge,
Life insurance is about so much more than an IVA. As Melanie states you should take advice from an IFA before cancelling the policy. I don't know for a fact, but I believe that any of the mortgage brokers that post on this site are also qualified to advise on this subject.

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk