Hello, when my I&E was reviewed by creditors for initial acceptance, I was told by my IP that they would not agree to accept the £85/month we had been paying for years to cover life insurance, including critical illness for myself and wife, which would pay off the mortgage in the event of the worst.
My IVA payments were increased by £85 over the original proposed figure, which meant that we did not feel we could afford to carry on the policy and the payments.
This has actually got me thinking (yes ok!!), if we were insured and somtehing happened to instigate a pay out, would this be considered a windfall, which the IP would take, before it could be used to pay off mortgage for which it was purchased?
Does this mean while in IVA it is not worth having insurance?
After nearly a year on IVA (without life insurance), it is not something I have ever been comfortable with, especially as we have 2 kids.
Similarly, I have a pretty good employer death in service cover which would be enough to pay off the mortgage but would that be taken to pay into IVA?
Disgusting that you were made to cancel all of your life insurance with two small children, but clearly you felt at the time that the IVA was more important. It may have been that your creditors felt that your life insurance was too high, but you should not have been made to cancel it completely as this has left your family seriously at risk.
Can I recommend that you request an immediate 15% reduction in your IVA payments - which should be allowed if your IP uses the IVA protocol - and use the saved money to reinstate that policy or take a new one out.
You will need to check to see who the various policies are assigned to. If you have assigned them specifically to your wife, they will be paid to her in the unlikely event of your death whilst in the IVA, and they will not fall into the insolvent estate.
That isn't good that you were made to cancel life insurance as it is so important when you have dependants. I don't have children but I was allowed to keep my life insurance I assume as my husband is unable to work, I argued that if something happened to me, he would need the house paying off, this was accepted.
You should be able to make provision for your dependants even in an IVA as long as it's not excessive!
"It is never too late to be what you might have been"
Fiona
Hi Gareth, I always worried as we did not have this during our IVA. Hope you can come to some arrangement with your IP and I agree with Melanie it is disgusting that you were made to caancel such an important thing as life insurance. Hugs
Oscar
x
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Our IVA's over YIPPEE unbelievable!Seems like yesterday it was approved despite everything
Hi, life insurance is very important especially when you have children. We had life insurance with critical illness cover but were told this would not be accepted in our IVA. We did fight our corner as much as we could and have been able to have a life insurance policy but this no longer includes critical illness. Hope you can get something sorted.
I had the same problem but was able to prove that a new life policy without the critical illness cover would be more costly that the current premium. (thats because the policies are 10 years old and rates increase dramatically when you get to my age) x
Thank you all very much for your comments.
I did question it quite strongly to begin with, as they inferred it was medical cover rather than life insurance, I was asked to get quotes (which turned out to be similar to what I was paying) but it wasnt accepted and I did feel pressured into accepting and getting the IVA approved, as "I" was the one now holding it up.
Mel - I have my annual review shortly and will raise the issue again. My wife is working permanently now (first time in 3 years) so maybe we can offset some of her additional contributions.
This has been quite a tough year in many respects, not just financially but some personal issues too and it is only after nearly 12 months that I am beginning to get back on top of things and review things I should have covered 12 months ago.
From reading some of the strings on this site, it has helped enormously and I think I will be querying one or two other points too, ref my IVA.
Thanks again
Gareth
I hope you can get some insurance sorted out Gareth, if only for peace of mind.
Hopefully you won't need to claim on it!!!!!!!!!
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Thanks Jan and Lulu, yes this will be one purchase I will not be keen to get value for money from lol.
Look forward to the discussion with my IP
Regards
Gareth
Hi Gareth, getting new quotes is always more expensive. I actually have 2 seperate smaller life insurance policies and when I went into the IVA I tried to combine them and just have one policy but it worked out far more expensive. I do hope you manage to get something though
"It is never too late to be what you might have been"
Fiona
You could try John Tegg who posts on here as Coveritall - he does insurances and you can find his details under the 'Ask a Question' link on the left hand side of the page.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
For straight forward life cover ie non-profit policies, the go compare type sites are very good at giving you the best available rates on the market as most of the leading insurers use these sites. You will find that critical illness cover is now quite expensive so you may be better to just cover yourselves for life only and do remember that the rates increase with age and also for smokers. A lot of the policies which cover you for life (term assurance) also cover you for terminal illness which means that if you were diagnosed with a condition which meant death within 12 months, then the policy could pay out. Joint life first death policies are usually much cheaper than 2 single life policies. Hope this helps x
Hope you get something sorted, I don't personally have any to pay for but am insured via work, once the IVA has finished I am going to look more in depth at this. x
IVA final payment left the bank on the 26th January 2013...looking forward to a debt free future.
