Aviva Life Prime - Life Insurance Cut in Benefit Amount - Is it Allowed?

TryingNotToBeRippedOff

Hi Everyone

My parents are both in their 60's, in Feb 1993 they took out a life insurance from aviva (it was norwhich union at the time).

The monthly premium was set to £20 a month with a benefit amount of £31,927

Fast forward to Jan 2013 aviva sent a letter saying that to maintain the benefit amount the premium must virtually double to £37.44 or if the premium is kept at £20 thay they reduce the benefit amount to £20,587.

I just want to know if aviva are allowed to do this or if there is any come back from us to keep the premium at £20 per month and maintain the £31,927 benefit amount.

Any help asap would be greatly appreciated as my parents need to reply before the 4th of Feb.

dunstonh

I just want to know if aviva are allowed to do this

Yes they are.

or if there is any come back from us to keep the premium at £20 per month and maintain the £31,927 benefit amount.

No there isnt.

The policy they bought is reviewable. Not guaranteed. It is depeendent on investment returns achieving a certain amount and I would be surprised if any of these plans have (I have never seen one). We have had the worst investment decade in living memory. These sorts of plans went obsolete by the mid to late 90s. They just serve a niche market today.

Do your parents actually need the life assurance now? How is their health? i.e. could they buy a modern plan without investment backing?

TryingNotToBeRippedOff

Many thanks dunstonh for the quick reply.

I don't think they need it now, healthwise they seem OK though my dad does have a history heart problems and is on constant medication.

What are their rights in terms of cancelling the existing policy? Do they lose every penny they have given since the start of the policy or is there some sort of option to cashing in of the policy early ?
Can they change the existing plan to a modern plan without investment backing?

kingstreet

The current plan may have a surrender value, so they need to ask the insurer for their options - continue, make paid-up, or surrender.

They should investigate the options for new cover before cancelling the old one.

[Deleted User]

TryingNotToBeRippedOff wrote: »

Many thanks dunstonh for the quick reply.

I don't think they need it now, healthwise they seem OK though my dad does have a history heart problems and is on constant medication.

What are their rights in terms of cancelling the existing policy? Do they lose every penny they have given since the start of the policy or is there some sort of option to cashing in of the policy early ?
Can they change the existing plan to a modern plan without investment backing?

Hi TryingNotToBeRippedOff,

I can have this checked out for you if you haven't already been in contact.

If you can email in the following details to social@aviva.co.uk, I'll liaise with our Life team as soon as I receive it:

1) Policy holders full name (If it's a joint policy please include both)
2) Policy holders date of birth
3) Address including postcode
4) Plan reference number
5) Contact phone number
6) Please reference your username on MSE

Kind regards,

Martin Banwell
Aviva UK Social Media Support

TryingNotToBeRippedOff

Hi Martin

I have emailed you the details you requested