Am I being 'churned'? (life insurance, critical illness, incapacity benefit)

knoxy2000

My wife and I have several L&G policies for life assurance, critical illness cover, etc. They were taken out 2-3 years ago. I've just had a call from our financial advisor saying that L&G have changed their policies 'smallprint' basically, ie they are now 5 star policies (not 4), more illnesses added, definitions improved, they pay out easier now etc. Im just wondering if this is true, or if i am being churned to generate some extra commission? A friend who knows a bit about this stuff has looked at them and says they are decent policies, and there is no need to change them- suggests I am more than likely being churned.

Does anyone know if this story about L&G improving their terms recently is true?

Thanks :cool:

mjm3346

"Improved" them a while ago

http://www.legalandgeneralmediacentre.com/Press-Releases/Legal-General-injects-new-life-into-critical-illness-cover-2c8.aspx

shelly42

One of the new illnesses - "Multiple system atrophy - resulting in permanent symptoms" has a prevalence of 8.4/100,000 according to patient. co.uk so it might be worth weighing up whether or not the extra cost is worthwhile.

dunstonh

if i am being churned to generate some extra commission? A friend who knows a bit about this stuff has looked at them and says they are decent policies, and there is no need to change them- suggests I am more than likely being churned.

Is your adviser a tied agent of L&G or an IFA? The fact you say you have several policies with L&G suggests its a tied rep. I havent used L&G for ages. Tied agents are expensive and limited in what they can offer. The same L&G product via an IFA is cheaper than using a tied agent. It would be worth you having a review but use an IFA to do it as you could probably kill two birds with one stone. Improve your cover and reduce your costs.

lordhaldon

I agree with dunstonh - get the advice through an IFA. Whatever you do, if you decide to revamp your insurance, do not cancel your DDI for the existing policy until the new - if any new - policies are in place. And remember, if you do take out new policies, the responsibility for canceling the DDI on the old policies is yours. Hope this helps.

knoxy2000

Thanks all,

I just looked up the firm and it says they are "an appointed representative of the following companies, which are authorised and regulated by the Financial Services Authority for advising on and arranging the products shown: Legal & General (Portfolio Management Services) Limited (life assurance, pensions and investments) and Legal & General Partnership Services Limited (mortgages and insurance)."

I thought they were IFA but this suggests not?

I have various policies for me and the wife including death/terminal illness, critical illness, mortgage payment insurance totalling around £80/month.

dunstonh

I thought they were IFA but this suggests not?

That means they are tied sales reps of L&G. Not IFAs. There was some research a year or two back (I think it was Which?) that found over half of those seeing tied agents thought they were seeing IFAs. So, you are not alone.

I have various policies for me and the wife including death/terminal illness, critical illness, mortgage payment insurance totalling around £80/month.

Given tied agent vs IFA pricing, you could probably knock that down to around £65 on like for like. Maybe with different companies considered a bit more.

knoxy2000

Thanks a lot, you have all been very helpful!!!
I will try to find a good IFA in my area for some quotes.