Selling An Endowment Policy Privately

a) Yes. b) No. c) Don't know. The purchaser will need to notify the insurance company, and take over payment of the premiums.

And don't forget: If the policy has life insurance built in, as it almost certainly will have, your friend will benefit from it, but it will continue to be *your* life that is insured. This has two important implications:

1) If your friend wants to insure his life, he will need to make other arrangements. 2) If your friend needs to get rich quick, he has an incentive to "arrange" for you to have a fatal "accident". This puts a sobering perspective on the phrase "making a killing"!

"Ronald Raygun" wrote

I thought that the sale to a non-related party stopped the life cover being applicable?

Hence the requirement for "insurable interest" with life policies. [And the little anecdote where you can have insurable interest in (eg) a spouse, but not your small child, because (apparently!) "in the olden days" people used to have a kid, insure it, and do the unspeakable just to get a few quid. Shudder.]

[If you like shudder stories, there was a report ?yesterday about descendants of cannibals apologising to the descendants of an ex-missionary whom their ancestors had eaten 120-odd years ago.]

But you *do* have an insurable interest in your children. Why do you think people (used to -- but many still do) have children? It's not some altruistic notion of ensuring the survival of humanity or even of the family line. Nature does that, but we clever beings do it for a much better reason, namely so that they will look after us in our old age. If anything should happen to them, bang goes our DIY pension. If that's not an insurable interest, I don't know what is.

I think you need (the beneficiary to have) an insurable interest in the event insured against when *taking out* a policy, but I'm not sure it remains the case when the policy is sold. I agree it would be sensible if it were. Do TEP premiums go down by the cost of life cover?

In article , Tim writes

When I sold mine a few years ago, a solicitor acted for the buyer. One of the questions asked was for details of 2 people of whom they could enquire after my well being from time to time.

This was presumably to establish if I had died, and they could collect.

I am, however, aware of the concept of "insurable interest", but wasnt particularly bothered at the time, as that would be their problem, and not mine.

I just wanted the money, and got it.

I am assuming that it isnt worth their risk to have a hit man search me out .

[snip]

Nonetheless, it's not possible to insure it.

The insurable interest needs to be there when the policy is taken out but continuation of cover under the policy is not dependent upon continuation of the insurable interest - it is sufficient for it to have been there at outset.

So... yes, there is an incentive for the purchaser to arrange an "accident" for the insured person. ;-)

"Gareth Kitchener" wrote

Should be outlawed!! :-(

In the US I believe there is a market in life insurance policies of people who are terminally ill, and who would like to get at (some of) the money before they die.

So what do they do? Put out a contract on themselves, with a built-in re-configurable time delay? Sounds good to me!

I assume that you are referring to Viatical Settlements?

IIRC, there is a UK market too?

Yes it is.

"Ronald Raygun" wrote

How would you go about insuring your young child for more than the allowed (small) limit in the legislation?

It is to the extent that if you did arrange for such an accident, you wouldn't be allowed to collect the payout.

I didn't say "young", but looking back I see you did say "small". What is this limit to which you refer, and does it only apply to parents, and does it disappear when the children come of age?

Otherwise, I'd just get whoever does have an insurable interest, possibly the child itself, to take out a policy and then sell it to me.

"Ronald Raygun" wrote

I can't remember all the exact details (hence my ambiguity in my earlier posts!) but I think there's some barrier around age 12 and a monetary limit of around 300 sum assured....

Yes, I think so.

I don't think I've heard of it, but maybe it would be kept quiet :)

In message , Tim writes

No.