Life Insurance - increase of premiums

Zoe27

My husband has just received a letter from Aviva enclosing a review of his life insurance policy. It states that the policy is now a high risk and won't sustain the valuable benefits. If he wishes to maintain the benefits of the policy he needs to increase his premiums from £24.15 per month to £94.15. This will ensure that valuable protection benefits are maintained.

He can maintain his current premium but this reduces the death benefit by half. Or leave policy unchanged which may mean that the policy will not support the benefits for its whole term.

The policy started in 1988 - can't remember original monthly payment - but it increased every year for first 5 years and has been £24.15 from then on. We thought that the benefit amount that has been supplied from then on would be what would be received on death.

Can anyone tell me if this is mis-selling and what I can do about it?

Many thanks.

:eek:

stephenni1971

To the MODs - any chance of making one of these a sticky? Same question gets asked at least a couple of times a week.

To the OP

It's highly unlikely to be a mis sale. It's an old style investment backed policy. Almost impossible to get now but common then.

Do you still need cover? Have you looked at modern alternatives with an IFA or specialist protection adviser?

dunstonh

Can anyone tell me if this is mis-selling and what I can do about it?

Premiums are only guaranteed to remain the same on plans with guaranteed premiums. Back in the 80s, guaranteed premiums were unusual as the cost of the premiums was higher than reviewable or investment linked plans. Insurers were wary of taking on guaranteed premiums and effectively people went reviewable as it was cheaper. AIDs didnt turn out to the issue they were so scared of and today, guaranteed premiums are far more common. However, that does not make it a mis-sale in 1988.

What your husband should have done is reviewed it with each premium review to see if he could move to a modern alternative. If he chose not to review it and stick with what he had but amended then that was a personal choice he made.

It is just like any other retail product. Do you still have a car or television from 1988 or have you changed them several times? Look how poor 1988 televisions and cars look compared to today. Doesnt make them mis-sold when they were sold. Things just move on.