Jointlife Insurance policy from Abbey Life

valbain

I have made a claim on jointlife policy when my husband died, however it appears that the guaranteed sum insured on first death has been drastically reduced, can someone enlighten me as to why the word guaranteed is used on the policy when quite clearly it isnt, I have not accepted the cheque as it is not even worth a year of my late husbands salary, when we purchased this policy in 1993 we were not told that this guaranteed sum insured would be at risk of being reduced over the years, I feel conned and cheated by this company and wonder if there is anything I can do, I have complained to them, all I was given back was what was buried in the small print that this amount may have to be topped up by taking out another policy. Any advice anyone on what I can do to have the whole of the guaranteed sum paid out to me.

dunstonh

however it appears that the guaranteed sum insured on first death has been drastically reduced

On these legacy plans the guaranteed sum assured is based on the premiums you pay. They have review points periodically and you can choose to pay more to keep the sum assured the same or reduce it down. They also have an investment element and the theory was that the investment element could exceed the sum assured but where it didnt, you were guaranteed to get the sum assured.

when we purchased this policy in 1993 we were not told that this guaranteed sum insured would be at risk of being reduced over the years

There would probably have been a review point in 2003 and another in 2008. Did you keep the sum assured the same or reduce it in either of those? Did the policy premiums even continue or was it made paid up?

I feel conned and cheated by this company and wonder if there is anything I can do, I have complained to them, all I was given back was what was buried in the small print that this amount may have to be topped up by taking out another policy. Any advice anyone on what I can do to have the whole of the guaranteed sum paid out to me.

These plans are obsolete by many many years. investment linking may have worked up until the early 90s but with a low inflation economy they dont. This is why investment linking is now very uncommon with modern plans and has been for a good many years.

It is highly unlikely that there is anything wrong here. It would depend on whether the sum assured was changed at one of the review points or it was made paid up or was still being paid.

valbain

Can u email me, [EMAIL="valbain@hotmail.co.uk"]valbain@hotmail.co.uk[/EMAIL] about this please, yes premiums started at £20mth, then after first 5 years went to a max of £30mth dd through bank paid right up til my husbands death, there is an investment linking to a managed 6 funds and there have been two reviews which my husband complained about, it was after the first one that we realised something was wrong and we were never told when we took out the policy that the guaranteed sum would ever change or would be at risk, is there anything that I can do? The guaranteed sum assured on policy is £45,000, they have sent me a cheque for £20,121 which I have no intention of accepting. Appreciate if u would email me as I would find that easier to give u more details and have policy at hand, many thanks, ur a gem.

roguebrogue

When the reviews you mentioned were done, did you accept the increase in premium?

valbain

This is a Covermaster Plan (unit-linked whole of life policy) designed to pay out the Death Benefit in full on death of the first life assured to die, taken out in JULY 1989, sum assured £45,000 payable on the first death of the lives assured, premium £20 escalating by 10%pa for 5 years to reach the full contribution of £30 in the sixth year,total premium £20.00 payable throughout the lifetime of the Life Assured, Allocation of base premium 1st policy Year 0%, 2nd policy year 10%, subsequent policy years 101%, managed series 4 100%. The value of our units on 29th June 06 statement was £4,003.35 and the life cover was reduced to £20,121, found a letter here in 1999 which says as your covermaster plan has been above the standard cover level, (dont understand that, cause it is standard cover we took out), the review has confirmed that a reduction in sum assured is now necessary, the result is that we will need to reduce your current sum assured of £45000 to £32953 with effect from 25th july 1999. There is then a bit about taking out replacement cover of £18,886 through a latest range of plans that they have introduced, asking for us to apply by 22nd july 1999. It states at the bottom that our monthly contributions will not be increased. My late husband dealt with this letter, we continued to pay the full £30 month stated cause he did not see why we should be having to take out another policy costing £17 a month which we could not afford. The policy documents state the death benefit is the guaranteed sum assured or the bid value of the units in the plan, whichever is the greater. Is that any help? Dont understand it all!