Whole Life Assurance

eliot67

Can anyone Help?

My Mother inlaw has a Pearl Whole Life Assurance policy that is fully paid up. It is an Industrial Branch Policy. She has paid £10 per month for 20 years (total paid in £2600). The sum assured was for £1860 (together with such bonus additions).

Pearl have offered £1744 as a cash in value, this hardly seems fair as to what has been paid in and no sign of any bonus.

Any views would be appreciated.

Thanks in advance

stephenni1971

eliot67 wrote: »

this hardly seems fair as to what has been paid in and no sign of any bonus.

Whether its fair to you or not they are doing nothing wrong. Plans like this are pretty obsolete now, the link between insurance and investment has ( rightly in my view ) been broken.

There is little you can do as the value quoted is based on the value of the investment element of the policy.

eliot67

Thank you for your reply. Would have been better sticking a tenner under the matress every month for the last 20 years. Better policy information should have been given at the time.

dunstonh

My Mother inlaw has a Pearl Whole Life Assurance policy that is fully paid up.

Do you mean its in force with premiums being paid or paid up which means no premiums are being paid. I am going to assume at this point you mean she is still paying.

Pearl have offered £1744 as a cash in value, this hardly seems fair as to what has been paid in and no sign of any bonus.

Its a whole of life assurance. Its not meant to be cashed in. If you do that you get less benefits.

Would have been better sticking a tenner under the matress every month for the last 20 years.

Not really. The Pearl plan would pay the sum assured plus the bonuses on death. Surrendering the plan loses the sum assured and just pays out the small investment element. If you add the surrender value to the sum assured then thats a lot more than she paid in.

Better policy information should have been given at the time.

No it shouldn't. The fact its an industrial branch policy meant it was designed to be sold door to door and be simple and cheap. It was just that. On death, it will do exactly what it is meant to do. i.e. pay the sum assured plus bonuses. Many of the pearl whole of life plans also stop taking contributions after a certain age yet still pay the benefits as if the premiums paid. So, if she is elderly, it may be worth holding on to if she has one of those

These plans are largely obsolete. In fact IB policies are long gone from new business (early 90s saw the last). However, they served a purpose that many people think has been lost and people are worse off because of it.

eliot67

It is paid up fully. Just had letter from Pearl to cancel direct debit as all premiums have been paid. Would it be better to keep rather than taking the cash value? I presume that on death a larger sum would be paid out?

Thanks

dunstonh

eliot67 wrote: »

It is paid up fully. Just had letter from Pearl to cancel direct debit as all premiums have been paid. Would it be better to keep rather than taking the cash value? I presume that on death a larger sum would be paid out?

Thanks

On death, its the sum assured plus bonuses. On surrender, its just bonuses a probably a small penalty charge.