Life Assurance Help

spanky1982

HI All,

My mother took out what she was led to believe was a life assurance policy that would mature and pay out next year. She thought it was a savings plan that included life cover. Recently she contacted the company and was told that it did not pay anything out unless she died.

She has been paying £10pm since 1995 with the thought that she would be able to help my younger brother when he turned 16 or in the event of her death know that there was sufficient money to pay the costs of funeral etc and still be able to give my brother the head start in life which she wanted him to have.

Now that they have told her that there is nothing to come at the end of the term she feels that she was mis sold the policy and led to believe it was something different to what it is. Is there anyway to challenge this, and what would be the best course of action to take. I feel that £10pm back in 1995 is a lot for life assurance only, am i wrong?

Your thoughts and advice would be appreciated.

Thanks

dunstonh

She thought it was a savings plan that included life cover.

You mean she thought it was an endowment policy.

Now that they have told her that there is nothing to come at the end of the term she feels that she was mis sold the policy and led to believe it was something different to what it is. Is there anyway to challenge this, and what would be the best course of action to take. I feel that £10pm back in 1995 is a lot for life assurance only, am i wrong?

£10 for life assurance in 1995 was not a lot. Life assurance was certainly more expensive in 95 than now but even back then providers minimums were often around the £10 mark.

if she thinks she has been mis-sold she can complain to the advising company explaining that she didnt want a life assurance policy but wanted an endowment policy. That would actually be an interesting complaint as everyone is complaining they dont want endowment policies. So, she is bucking the trend

Its possible that it could be upheld in a complaint but it would require her to have had no financial need for life assurance. If there was no finanical need at the time (no dependents, no-one worse off in the event of her death) then you would expect the complaint to be upheld. If she had a financial need though, you would expect the complaint to be rejected.

Looking at the timescale and the size of the premium, its probable that it was an insurance agent and at that time most providers had moved their endowment premiums to a minimum of £20 or £25pm. So, maybe they didnt have an option for her

spanky1982

Thanks for that advice. I will explain this to her and she can decide if she wants to complain.