Problem with life policy

saffsmum

Hi all,

In 1998 we started a small endowment (balanced life) plan with Clerical Medical to mature when our son was 21. In February 2010, I switched bank accounts and called everyone on the DD list to change the details. Last week I received a letter from Clerical Medical stating that the last premium they received was on 1st Feb 2010 and the plan has been 'made up'. I have contacted them and they are willing to re-instate the policy as long as we send a chq for the 29 missed payments, and notice that because more than 13 payments have been missed the re-instated policy will become non qualifying.
My issue with CM is that it took them 29 months to inform us that they had not been receiving the payments. Obviously if they had contacted us after the first one we would have sorted it immediately.
I really don't want my son's policy to be hit with tax, would I be better off cashing it in and putting it in an ISA or something? can I even do that?
And can someone explain what the bid price of a policy is please?
I'd really appreciate some advice here.

dunstonh

My issue with CM is that it took them 29 months to inform us that they had not been receiving the payments.

Although it took 29 months for you to realise it as well.

Obviously if they had contacted us after the first one we would have sorted it immediately.

Maybe they did. Typically companies send out automated letters when direct debits are not paid.

I really don't want my son's policy to be hit with tax, would I be better off cashing it in and putting it in an ISA or something? can I even do that?

At the moment, the policy is qualifying. It is only if you pay the back payments that it will become non-qualifying. So, dont pay the backpayments and use something else for that money.

And can someone explain what the bid price of a policy is please?

It is the selling price of the units.

saffsmum

Although it took 29 months for you to realise it as well.

Yep true - I have a lot of policies and a lot of direct debits - I should have checked.



Maybe they did. Typically companies send out automated letters when direct debits are not paid.
Honestly the first communication I have had from them about this was last week



At the moment, the policy is qualifying. It is only if you pay the back payments that it will become non-qualifying. So, dont pay the backpayments and use something else for that money.

So what happens? If it is 'paid up' doesn't that mean they will either freeze it or send us a chq for what we have paid in?
Do you have some suggestions on what would be a good investment? The plan had another 6 years to run.

sorry I thought I had quoted then - not quite got the hang of this yet