How much do premiums typical increase on reviewable Whole of Life Assurance

Mlumley

Hi,

I was wondering if anyone has any advice as to the typical/historical increases, we would likly see at every 5 year reviewable increase.

Currently there is a policy in the region or 170K (joint death. ages of approx 65-70). Cover was £220 odd a year, but has now reached its first review date. The premium, has subsquently increase to £1000pa for the same level of cover.

Looking to the future, to keep the 170K of cover, what sort of cost pa could I expect at the next review date and the one after for example?

Any advice from experts who work for or in insurance companies industry, highly welcome! The provider L&G, won't stick there neck out and give any sort or idea, no matter how vague. Of course I realise that no one whats to be quoted on something they said, but I'm sure they got an idea as to what sort of increase they gave to "others".

i just want to know if there is any sort of limits to increases etc, as obviously if a policy cost goes up from 1K to 5K etc it becomes un servicable.


Historical data welcome too.

Thanks
Matt

kingstreet

Absolutely no way of knowing, I'm afraid.

The review is based on investment returns in the interim, mortality statistics and your increased age and the sum assured.

TBH these plans tended to be taken out on a maximum cover basis which meant highest cover and lowest premiums for the first ten years. After that, the premiums were pretty much bound to increase or the cover would need to reduce.

I'd think about getting a comparison with a term assurance to see the difference.

dunstonh

Are you talking about investment backed or non-investment backed?
If investment backed, it will depend on the funds used and the target growth rate used.

You also have mortality stats as kingstreet says above. So, going back some years, you saw the threat of AIDS have an impact on reviews yet that went down over time as that fear was never realised.

With pure life assurance (no bolt ons, no investment element) there are appears to be no good reason to go with reviewable as the cost difference with guaranteed is either non-existent or so small that its not worth the risk.