Life and Whole Life

1200max

In 1999 I asked my accountant (who is also a friend and used to be an insurance agent) to help me set up a life assurance policy to pay out in 2011 as I was expecting a shortfall of £10,000 on my endowment mortgage. I have been paying £20 per month since July 1999
Just phoned the insurance company up to find out when the policy is due to mature and how much the value is to be told that it is a "Whole Life" policy and not a "Life" policy which is only payable on severe injury or death. I was told that it can be surrendered and the amount would be £751!!!!!
I know when it was set up it was done so I received a lump sum (£10,000) at maturity to pay this shortfall - I, and my accountant, would never have set it up as a whole life payable on death or injury as I knew I would need the money in the future.
I have asked the insurance company to refer it to their investigations department to look into this but, where do I stand regarding this?

Any advice would be helpful.

magpiecottage

If the accountant set the policy up then it is him you must complain to because he should have checked it was suitable for you.

noh

What does the policy document you have say?
How did you expect a £20 a month savings policy to pay out £10000 after 12 years?

1200max

noh wrote: »

What does the policy document you have say?

I wish I could find everything relating to this policy. My wife (now ex wife) left in 2003 and since then, whilst searching through various documents relating to pensions and policies, I have been noticing various pieces of paperwork have mysteriously gone missing, this policy being amongst one of them. All I have is the policy number, policy booklet and the statement.

dunstonh

Just phoned the insurance company up to find out when the policy is due to mature and how much the value is to be told that it is a "Whole Life" policy and not a "Life" policy which is only payable on severe injury or death.

Sounds about right with such a small premium of £20pm.

I was told that it can be surrendered and the amount would be £751!!!!!

Again, sounds about right.

I know when it was set up it was done so I received a lump sum (£10,000) at maturity to pay this shortfall

A whole of life assurance has no maturity date and the figure of £10,000 with a £20pm premium does not stack up over a 12 year term. Any regular contribution investment product on that premium or timescale would be closer to £3000.

my accountant, would never have set it up as a whole life payable on death or injury as I knew I would need the money in the future.

Well he did.

I have asked the insurance company to refer it to their investigations department to look into this but, where do I stand regarding this?

The insurance company have no liability for the product you were sold or the advice you were given. The liability lies with the accountant and any complaint should be made against him.

The insurance company will check the application to make sure what was set up matched the application (failure there would be rare as the forms for whole of life are different to ISAs (the product that should have been used). Indeed, most insurers dont even offer ISAs. Plus the person giving the advice (the accountant) has to keep a record of what was requested and set up and check it is all correct to what was requsted. So, you would expect the insurance company to reject your complaint and say they set up what they were told to set up and if you have any issues over that you should go to the seller.

1200max

dunstonh, thanks for your reply.:)
I have phoned my accountant and am waiting for him to call back to see what he has got to say. I just hope he still has got some of the paperwork relating to this policy when it was created!!!

dunstonh

I just hope he still has got some of the paperwork relating to this policy when it was created!!!

If he hasnt then he is in trouble. With regulated investment products, the onus will be on him to prove he didnt mis-sell it to you. If he can't do that then he will have to uphold your complaint. If he fails to do that then you refer it to the FOS and they will look it at it. A general rule of thumb (which is not 100%) is that if its not on paper then it didnt happen. Documentation is King and cannot be trumped by much