Advice-da 67 needs policy 2 cover funeral expenses and leave a few thou for mum

smsmith

Hi, I hope somebody can give me some advice. To cut a long story short my mum took out a policy for my dad 10 years ago paying £20 per month to guarantee a payment of £8k on his death, latest statement says that if she continues to pay £20 she will get £2.5 and this may decrease further, she needs to pay an additional £38 per month just to maintain the £8K - I'm furious, mum is suicidal.
Anyway we have decided this may not be the best policy to continue with and I was hoping somebody could give me some advice on where to go from here with regard to a new policy. He is 67 and a non smoker.

Thanks

dunstonh

sounds like the policy wasnt guranteed but reviewable.

It is important to get guaranteed. Both L&G and NU currently offer guaranteed whole of life plans but many others are reviewable.

smsmith

The current policy is L&G, do you think it is worth speaking to them to see if they can offer an alternative?

Claudie

My knowledge of insurance is little or none (except as a consumer) and I am sure someone will help with a technical answer but personally, I would think it may be worth writing to them and explaining that your Mum feels like she has been mis sold the policy - if she does take another policy is it worth ensuring she gets her premiums plus interest refunded from the first policy?

Something similar happened to us a few years ago and I got all my premiums back and started fresh elsewhere.

dunstonh

If you go direct to L&G you will pay more for it than going through an IFA or doing DIY through Cavendish.

Every few years providers alter their products and whole of life assurance plans have become much better value in recent years. 10 years ago, they were virtually all investment linked and reviewable based on the performance of the underlying investments. The versions available today can have no investment linking and are better quality. The NU version is only about 6 months old and as far as options are concerned, its better than the L&G. How the pricing will be between the two though will depend on the quote data.

smsmith

"if she does take another policy is it worth ensuring she gets her premiums plus interest refunded from the first policy?"

Sorry, I am way out of my depth here, does this mean asking them for what she has paid to be refunded?

They have offered £105 if she closes the policy now !!!

smsmith

I've had a look at a few of the policies on the internet and a lot of them only cover up to age 70. Also when it asks for a term of cover, how can I determine this? Some will only allow 3 (until he is 70), the rest I am not sure about, I have been trying it with 10 years, but the thought in the back of my head is "in ten years if he is still alive are we back in a similar scenario looking for insurance...only worse cos he' older!"

Claudie

smsmith wrote:

"if she does take another policy is it worth ensuring she gets her premiums plus interest refunded from the first policy?"

Sorry, I am way out of my depth here, does this mean asking them for what she has paid to be refunded?

They have offered £105 if she closes the policy now !!!

That is exactly what we did about 3 years ago. I had all my notes from when we bought our policy and I sent a long letter with a copy of my notes explaining we were definitely told that our policy would be worth xxx after 10 years when it was worth no where near that. And similar to your Mum, after 10 years I was told our premiums would have to almost double to keep our policy.

They offered us something similar and I wrote an offical complaint letter stating that if I didn't receive a full refund I would go to the Ombudsman. I got a letter back denying all liabilty but refunding the premiums in full. It was a bit complicated but I truly believe I was mis sold and I would complain to anyone who would listen.

smsmith

Has to be worth a try at least

Ta.

Claudie

smsmith wrote:

Has to be worth a try at least

Ta.

That's what I thought....good luck.

dunstonh

You can try but don't hold your breath. The product they sold was correct for the purpose required. However, it is a case of how the reviewable/guaranteed side of things was documented that will tell in this case. Plus if there is an investment element, what risk was taken with investments against the risk profile recorded.

As the product was right, you have to hope that the documentation shows a fault or fails to mention that it is not guaranteed. 15 years ago, maybe the case. 10 years ago and you would "expect" a mention of it. (doesn't mean there will be).

I would also check before you complain to see what the pricing is like now. With life cover costs having dropped, you may find this is a blessing in disguise.