Joint Life Insurance -payout only on both deaths?

catzooo

Can anyone advise on this please?
My mum sadly passed away last month at age 89. I am trying to help sort out their finances. Probate is also started with a solicitor.
Mum and Dad took out a joint life insurance policy over 50 years ago, paying £12 each to Co-op. This was when Co-op man used to come round to the house to sign up and to collect the premiums.
Policy seems to be now with Sun Insurance. We have contacted them, and been told that the policy will only pay out when both mum and dad have died. Payment now reduced to just one x £12 per month.
Dad cannot find the 50 year old original documents.
Can this be correct? What would be the point in them taking out this policy? Dad thought it would pay out on the first one to die, to help out the other one.
Policy was taken out before I came along, so who would have benefitted from this type of policy?
Over 50 years they have paid over £62,000 into this policy! The final payout will be far less than this.
I am wondering if this Could this be a case of mis-selling? Dad did not understand there was no payment until both died.

dunstonh

Sorry for your loss.

Can this be correct?

Yes. Policies can be set up on joint life, first life basis or second life basis.

Policy was taken out before I came along, so who would have benefitted from this type of policy?

It was not uncommon for families back then to make sure cover was in place to settle the estate on second death as to ensure costs could be paid before the estate was settled. On first death, the spouse would pay for the other but on second death, people thought that it was better to have a policy to pay for it rather than leave it to families. Such policies were very cheap and remember that was an era of more personal responsibility and less general wealth.

Over 50 years they have paid over £62,000 into this policy!

I suspect you have your figures wrong. It is unlikely to be £12pm each taken out 50 years ago. More likely to be 12pence. or maybe £12 a year.

I am wondering if this Could this be a case of mis-selling?

No. It is 38 years prior to regulation and almost certainly an industrial branch policy rather than ordinary branch (the stuff you see today) and these were not sold on an advised basis or anything near similar you see today.

Are you sure the policy from Sun Life is the same one as the CIS policy? Co-op and sun life are two unrelated companies. I am not aware of one buying the others insurance book. Possible but I havent come across it. Maybe there are two policies?

catzooo

Thank you for replying Dunsonh
Dad has passed all his documents and the recent letter stating that no payout was due now on to the solicitor dealing with probate.
At the time parents had just taken on a mortgage, so maybe they thought the policy would settle that.
I did think £12 per month would be a lot of money 50 years ago. But I have looked through the last 2 years bank statements and they were paying 2 x £12 per month. Maybe it did start out much lower payments.
Got to say that dad is a little confused, grief, and maybe some signs of dementia starting.
They seem to have 2 similar policies- SunLife and FRiends.
Have suggested he checks it through when he next sees the solicitor. And plan to go through all of his DD's next weekend with him. I wish I could go with him to see solicitor but I live across country so can only get over there at weekends.
It does seem then that the policy is just that - to pay out only on both deaths to settle their estate. Not something I have come across before.
Thank you for your advice

dunstonh

I did think £12 per month would be a lot of money 50 years ago. But I have looked through the last 2 years bank statements and they were paying 2 x £12 per month. Maybe it did start out much lower payments.

I suspect that they are not the same policies. For example, industrial policies (which would be 50 years ago) would be collected by an agent at the door. When these stopped, they used standing order in their place. Not direct debits.

Friends Life bought the AXA Sun Life book a few years back. So, there is a possibility of branding change there. Sun life are heavily active in the over 50s life insurance plans. i wonder if he took one of those out. The sort of premiums on those is £10-£20 each but there are something more common in the last 30 years (although also typically poor value).