Can I sell my 'whole life' insurance policy?

yanagirl

Hi I'm new here and just wondered if anyone can advise on selling my whole life insuance? Its a lot to pay out monthly but as I've had it for 15+ years i hate to think of all the money I've wasted if I cash it in. The firm I am with are offering buttons to settle. I'm not sure if people buy whole life insurance, could any of you help? Thanks in advance.

Annisele

I don't know of any companies that buy whole of life (WoL) policies, and I'd be very surprised to find any.

WoL policies aren't all designed to provide much in the way of savings (unlike endowments). In addition, most WoL policies are reviewable - so the premiums could increase dramatically later on.

When you take out a WoL policy, you sometimes get to choose whether you want it on a 'maximum', 'minimum', or 'standard' basis.

'Maximum' means that most of your premium goes towards paying for life cover, and very little towards savings - so after ten or fifteen years the surrender value will be near-zero and your premium will have to rise. The monthly cost of a maximum cover WoL can be similar to the monthly cost of a term assurance policy. Since you describe the surrender value as 'buttons', I suspect that you've got a maximum cover policy. Even if companies did buy WoL policies, they wouldn't buy one of these as the premium is likely to keep increasing.

'Minimum' means that most of your premium will go to savings, and not so much for life cover.

'Standard' is in the middle. Usually the premium will have been chosen so that, assuming all of the insurer's assumptions about investment growth etc are met, the premium will be enough to purchase cover for the whole of the insured's life. However, 15 years ago insurers were making investment growth assumptions that now look a bit optimistic, so even these policies sometimes have substantial premium rises.

Does that help?

yanagirl

Thank you for this its a great help. Looks like I am best taking the surrender option and cutting my losses.

Annisele

Don't rush into cancelling it; it may still be good value if you actually need the life cover. And it might not be reviewable, and it might not be on a maximum cover basis - worth checking with the life company.