Living Will?

Question

Could anybody please explain how a living will works and what is needed

Answer 1

I believe this is a US invention (you know you posted to UK ?)

As I understand it, you must have some incurable illness (eg AIDS) and some really high value Life Insurance that will almost for sure have to pay out.

You then go to the Life company and cut a deal - you adjust your will so the Life Insurance benefits will go straight back to the Life Company when you die, and in turn they pay out money to you 'up front' every year until you die.

Example.
You have purchased £100,000 Insurance with 20yrs left to run (so if you die within 20yrs, they pay out £100,000 - if you die AFTER 20 yrs they pay nothing).

You get diagnosed with AIDS and told you have 3 years to live.

It is almost 100% sure they Life Co. will have to pay out the £100,000. So the Life Co. should be willing do a deal where they pay you (say) £5,000 a year 'now' (until you die) and you change your Will so the £100,000 payout goes straight back to the Life Co.

Plainly the Life. Co. needs guarantees that your relatives won't contest the Will - and also that you won't change your mind & re-write the Will :-)


I don't know if this is possible in UK - you will need legal advise ...