Life Assurance review

snp

Hi, my me and my mum have Abbey Life life assurance policies which we took out quite a while ago for to cover the value of assets we have. We recently received letters saying that reviews had taken place and the amount we are now assured for is less than half the original value! They have said that by paying double what we pay each month we can maintain the original amount assured. This doesn't seem right to me. Do we pay the extra, carry on paying the same amount for less should anything happen or shop around given the fact we have had these policies for about 15 years?

dunstonh

This doesn't seem right to me.

Why? It seems perfectly normal for re viewable plans of that era with an investment element.

Do we pay the extra, carry on paying the same amount for less should anything happen or shop around given the fact we have had these policies for about 15 years?

The plans you have are obsolete. If you can arrange new versions cheaper and with the same benefits then there is no reason not to do so.

whiteflag_3

dunstonh wrote: »

Why? It seems perfectly normal for re viewable plans of that era with an investment element.


.

yes if your a bloody IFA!!!

whiteflag_3

snp wrote: »

Hi, my me and my mum have Abbey Life life assurance policies which we took out quite a while ago for to cover the value of assets we have. We recently received letters saying that reviews had taken place and the amount we are now assured for is less than half the original value! They have said that by paying double what we pay each month we can maintain the original amount assured. This doesn't seem right to me. Do we pay the extra, carry on paying the same amount for less should anything happen or shop around given the fact we have had these policies for about 15 years?

Hows is your health as it may not be possible to get cover elsewhere as Dh has suggested.

snp

Hi, thanks for the replies. Whiteflag - that's my main concern, my health is alright as Im 30 but my mum is now 56 years old, and both our terms are going to be different as well which I'm assuming will affect the monthly costs.

The reason I don't think it's right is we took out the policy for an assured amount to cover our assests and wasn't aware that this could be decreased until we received the letter, doesn't this defeat the prupose?

Wutang_2

whiteflag wrote: »

yes if your a bloody IFA!!!

I think I may be right in saying that non-IFAs can read english too...?

dunstonh

The reason I don't think it's right is we took out the policy for an assured amount to cover our assests and wasn't aware that this could be decreased until we received the letter, doesn't this defeat the prupose?

These plans have review points. They never had guaranteed premiums. You can get plans with guaranteed premiums and its always worth buying them (especially at the moment where there is no price difference between guaranteed and reviewable). The main reason for the review point on these though is that they were priced on an assumption of investment growth that has not occurred. The review points are typically 5 or 10 year periods. So, you get it really cheap for a while and then it suddenly jumps.

If you check your policy terms you will see that it mentions review points in them.

Going back to when you took it out, prior to that there almost certainly had never been a period when investment returns fell short. So, it was probably never considered an issue. Nowadays, most life plans have no investment element. A few still remain but you can easily avoid them.

whiteflag_3

snp wrote: »

Hi, thanks for the replies. Whiteflag - that's my main concern, my health is alright as Im 30 but my mum is now 56 years old, and both our terms are going to be different as well which I'm assuming will affect the monthly costs.

The reason I don't think it's right is we took out the policy for an assured amount to cover our assests and wasn't aware that this could be decreased until we received the letter, doesn't this defeat the prupose?

yes but the sad fact is the policy you were sold has terms that allow premiums to be reviewed. If your health is OK you could get alternative cover however its may be better to get a full financial review to see how much cover you need , if any.

Wutang_2

whiteflag wrote: »

i think youll find they thanked me for my reply not yours you t*at

How ironic that you take a swipe at IFAs for being able to read policy documents and funnily enough you are illiterate!