Windfalls

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Destiny

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Post by Destiny » Tue Jun 26, 2007 3:25 pm
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Hi Everyone
This is a question about windfalls. I have critical illness insurance which will pay out several thousand pounds if I am diagonsed with something nasty. Would 100% of this money have to be declared and paid over if paid out by the insurance company?
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Adam Davies

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Post by Adam Davies » Tue Jun 26, 2007 3:51 pm
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Hi
A very good question.
Critical illness is designed to pay out once a serious medical condition is diagnosed and is paid instead of an amount on death.It is a useful insurance because you can get your affairs in order before[and if] you die.
Now really it is there to benefit your family[i,e pay off the mortgage and give then something to live on]and you can,when you take out the insurance,sign the benefit over to your spouse and would imagine that if you have done this then the money would be safe.Otherwise I fear that it may be classed as a windfall.
I,m sure one of the real experts will put me right.
Regards


Andy Davie
IVA.co.uk Spokesperson

About me:
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IVA Helpline: 0800 197 4838
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Andam Davies
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Destiny

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Post by Destiny » Tue Jun 26, 2007 3:54 pm
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Hi Andy
Thanks for that. However I am in a joint IVA with my husband. I will have to check with my FA if the benefit could be signed over to dependants?
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MelanieGiles

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Post by MelanieGiles » Tue Jun 26, 2007 4:32 pm
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For any of my clients with critical illness cover, I always expressly exclude this as a windfall within the debtor's proposals. If this has not occured in your case, and the need to recieve the money arises (which hopefully it won't) then your IP ought to revert to creditors to ascertain their wishes with regard to the money. It would be largely unfair for this money to be categorised as windfall, given the nature of the payment it is made to cover. Perhaps a sensible way forward would be to offer a portion of the monies in full and final settlement of the IVA, and therefore kill two birds with one stone.

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

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk
Regards, Melanie Giles, Insolvency Practitioner
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