Life insurance policy surrender

[fionacw]

I am looking for some advice on the following:

Situation:
My fiance has a life insurance policy with his ex girlfriend, which we have been paying for the last 2.5 years. We have now come to a point where we wish to surrender the policy and have calculated surrender proceeds by splitting redemption proceeds 50:50 and then deducting her unpaid contributions from her share. However she thinks that she is entitled to 50% of the policy even though she has not contributed to it.

Questions:
1. Are we right in deducting her unpaid contributions from her proceeds (we had the same problem with the mortgage and our lawyer at the time told us we were entitled to deduct her unpaid mortgage contributions from the value of the property)?
2. If we cannot reach an agreement can we take her to a small claims court (value of policy is only £6,000), or will we lose any right of the redemption proceeds?

We would be grateful for any advice.

Many thanks

 

[Grant-RTG]

Are they both owners of the policy??

Or is he the policy owner?

 

[fionacw]

They are both policy holders. But he is the only one who has contributed to it since Aug 2002.

 

[FirstChance]

Grant's question is important

and more specific then your answer.

with an insurance contract there are four main parties; the owner, the insured, the payer, and the benificiary. only the owner and the insured have the power to make changes, or have any entitlement to to any cash value. if your boyfriend is the owner, even if he is not the only one, he can surrender the policy and get the cash value. all of the cash value, and he doesn't have to give any of it to the insured, the ex in this case.

to be good about it, and to limit any potential law suits (let's face it you don't have to have a legal footing to file a law suit) he could give her half the cash value, minus any premiums she has not made, and i would think that very fair.

i see by your discription of the dollar amount, excuse me pound amount, that you are in the UK? what i said is how it works in the USA, more specifically in the state of California. i would double check with a local agent on the rights of the parties to the contract, but what you are suggesting sounds not only safe but fair too.