Problems with Life Insurance:Century

Rakesh.Chauhan_2

I need help asap. I have been paying £15 per month for life insurance using "Century Life" for the past 20 years.

I then received a letter through the post stating that the premium has increased by a massive 866% increase to £130 per month. If i dont pay it then my lump sum if i die will go down from £50k to £5k.

Can they do this? Is there some law which prevents them from doing this as its such a massive increase? If i cancel the policy will i get back the entire £3600(£15x12monthsx20years) back as i cant afford this incrase.

Is there someplace i can complain?

dunstonh

Can they do this?

If it is an investment linked whole of life assurance, then yes they can.

Is there some law which prevents them from doing this as its such a massive increase?

Nope. Its a contract event and quite legal.

If i cancel the policy will i get back the entire £3600(£15x12monthsx20years) back as i cant afford this incrase.

Nope. You are not entitled to premium refund. You pay to cover yourself if you die. Just because you havent died, doesnt mean you can get your premiums back. That said, there may be a value in the policy still (assuming it hasnt been eaten up by the increased premiums, which is possible now they are asking you for more).

Is there someplace i can complain?

Complain about what? This is how investment linked whole of life assurance policies work. If you dont like it, then look to switch to a non-investment linked whole of life assurance. Or, if you dont need whole of life cover, look to a pension term assurance, level term assurance or family income benefit.

Whole of life assurances used to be popular 20 years ago but since then the cost of term assurance has dropped massively and now whole of life assurances are only taken out to cover a whole of life need.

Rakesh.Chauhan_2

Problem is that 20 years back, i signed a contract which states that i only pay £15per month and will still receive the £50k back. Surely there is something i can do?

dunstonh

You didnt sign a contract saying that though. Premiums are reviewable and dependent on the investment performance of the contract. 20 years ago, we had a high inflation, boom/bust economy and that plan was designed to work in that sort of economy. The low inflation steady economy doenst suit that type of plan which is why it is now showing its age.