Guaranteed over 50s plans

Chris_Pollard wrote: »

Takman, can you quote the evidence to support this, or are you presenting an "opinion" rather than a "fact"? These products are attractive because of the ease with which they can be set up. The product suits certain consumers, those with significant health problems who cannot be insured through fully underwritten plans, those who are attracted by the gimmicky "gift" and those who do not wish to spend time and effort securing the best product for their needs. This is a competitive marketplace and the products have become better value for customers over the years. There will be assumptions that a certain percentage will lapse (stop paying premiums) and, of course, a reasonable number will die during the early period and their families will receive a return of the premiums paid. A number of products will "cap" the age and thereafter no premiums will be payable. However, there are probably customers who are stuck in the situation where they have already paid in more than they will receive. I'm not sure how many consumers are in exactly the same position with car, house, and buildings insurance but this is so often overlooked. If you are going to make such a statement, please be clear whether this is your opinion, or a fact, and if a fact, state the source. It's only fair on those reading your post.

Yes i would have to say that it is an opinion because these companies do not seem to publish their payout rate (for obvious reasons).

But it is a logical opinion because these companies are here to make money. If they didn't get more money paid in than paid out then they would go out of business.

Just think these are big companies which have to hire staff, run a call center paying all the associated costs, run a web site, advertising and marketing etc. These costs will be in the hundreds of thousands of pounds each year if not millions.

So to make a profit they need people to pay in more than they get out. So either lots of customers are paying a little more than payout in total or less customers are paying alot more than payout in total. Either way it is not a good deal for the customer in most cases.

The only time i think anyone should take out these kind of policies is if they have a medical condition that is very likely to mean they will die before they have paid in more than the payout (which means they need to sit down and work it out). But if only these people applied then the company would make a loss.

Anyone who doesn't have a medical condition should just put money away in a savings account each month/week and they are very likely to be better off.

Alot of these plans also use phrases such as "how will your loved ones pay for your funeral when you die". I personally don't like the idea of older people feeling they have to provide money to pay for their own funeral. They should use the money to enjoy themselves while they are alive and shouldn't feel they have to pay for a funeral which they will get no benefit out of whatsoever.