Life insurance in wrong name! What can i do?

HOLLIESAM

Hi,
40 years ago, my mother took out a policy on my fathers life. If he were to die, she would receive a payout/income. My mother decided that instead of her being the beneficiary, it should be me. My father has received all the documentation and the letters for the last 40 years. He called to change the policy from my mother as beneficiary to me. They could not find any record of my mother! Eventually they found the policy in her name so would only speak to her. It has emerged that they set the policy up all wrong and that had my dad died, the proceeds would go to his estate and not my mum. Shares were awarded to my dad 5 years ago which should have gone to my mum. There are so many other implications for this mismanagement - what if they had divorced? The company have admitted in writing that the mistake is theirs. My mum has written a letter and has been offered £50 compensation. The company has said they will take the shares from my dad and put them in my mum's name. I don't think this is fair? My dad received shares through their incompetence and should not be punished for their inadequacy. My mother does not have the shares she should and has had an incorrect policy for 40 years. Advice please??

Annisele

Presumably the insurance company is now prepared to correct the policy? In that case, I can't see that either of your parents have suffered a financial loss as a result of the mistake. (In theory your mother has lost and your father has gained, as a result of the shares - but if your father isn't entitled to the shares, then either you can all mess around suing each other or he can just give them to your mother).

If your father had died before the mistake was correct, his estate/beneficiaries might have suffered a loss with respect to inheritance tax. However, that didn't happen - so I think the only possible reason for compensation would be distress and inconvenience.

I also think there's an argument that your parents should have noticed. If they thought the policy belonged to your mother, but your father was receiving all documents for 40 years, why did they never question that? If the insurance company put things right very quickly once your parents questioned things, the £50 sounds fair to me. If they didn't put things right quickly, a little more D&I (distress and inconvenience) might be appropriate.

What do you think the firm should do to put things right? If you let us know that, people might be able to give you more help as to a) whether that's realistic and b) how you might be able to go about getting it.

dunstonh

My mum has written a letter and has been offered £50 compensation.

about the going rate for minor issues where no-one is financially worse off.

The company has said they will take the shares from my dad and put them in my mum's name. I don't think this is fair? My dad received shares through their incompetence and should not be punished for their inadequacy.

It is the correct action and the right thing to do.

Advice please??

The financial company needs to put things right as if they had been correct in the first place. They appear to be doing this. The next thing is to see if anyone has been made financially worse off because of this. No-one appears to have been. The last thing is to cover inconvenience. This tends to range from £10-£400 depending on the severity. In this case, there is no distress and no indication of much hassle. So, you would expect it at the lower end of the scale.

So, on paper, everything seems to be fair. It appears you want double shares but that is unrealistic. Apart from that, what else do you want and why do you think you should have it? (remember that if you cant persuade us, then you are unlikely to persuade them)