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"Life Insurance” – Should be called “Death Insurance” but they’d have a hard time selling the policies and how it impacts upon Debt Consolidation.
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Phew that’s one heck of a long title,
[perhaps I should have broken it up, but it
might have ended up sounding like the screen
play to some cheap TV Docu-drama).
However I digress.
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In the film, Crazy people, Dudley Moore plays a
jaded copywriter who ends up in a Sanatorium
after he decides to produce ads devoid of hype.
Such is the nature of the film these
advertisements are a roaring success and before
you know it he is back on the treadmill again.
One of the highlights of this film for me is the
campaign for Volvo Cars and I paraphrase here,
"They're ugly but they might just save your life
in a crash!"
Well it's the same with Life Insurance. Here is
a product that Insurance Companies and agents
the world over are desperate for you to have
some of, it's going to be quite expensive, it's
not going to benefit you in your lifetime and
when you do die the Company that sold it to you
is going to do their darnest to wriggle out of
paying out to your dependents!
However to be a morally responsible and
upstanding person who takes his or her
obligations seriously you’ve got to have some.
There is no getting round it.
So, how does this impact upon Debt Consolidation
you ask? How have I managed to contrive such a
tortuous link?
Well the reason is simple. If you are in the
unfortunate position of having to put some sort
of composition of Creditors together or some
sort of Debt Consolidation Plan together then be
very careful about how your advisors or the
Courts deal with any form of Life Insurance Plan
that you have in place and any potential
residual value that any such plan might contain.
The residual value of any such Life Insurance
Policy (or Pension for that matter) actually
goes some way towards being categorised as one
of your assets and as such is subject to the
whims and vagaries of any Consolidator should
they so wish to try and realise any value. The
best tactic to try and remember here if you have
to go down this road is to try and enter into
some form of horse trading whereby you could
offset the value of the early redemption of the
Plan against some other part of your estate.
The reason for this is obvious. Any early
redemption of a policy like this is going to be
subject to a whole raft of redemption penalties
and if you are not careful in the stampede to
try and liquidate cash to feed your arrangement
you could end up losing a whole selection of
potential benefits for your family and
dependents.
Not worth losing if at all it can be prevented.
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