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"Life Insurance" – Should be “Death Insurance” but they’d have a hard time selling the policies.
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.
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.
About the Author: Stephen Morgan is the principle Editor for Debt Collection Services (http://www.debt-collection-services.ws) and also Living with High Blood Pressure (http://www.livingwithhighbloodpressure.net) and http://www.highbloodpressure.name
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