Investment Plan with Windsor Life/ Reassure

RRS

I bought an investment plan with this company in 1993 and have been paying £90.31 every month since then. I have never missed a payment and money goes out of my account via direct debit. Now that the plan is nearing maturity, they are telling me that it is worth nothing. The policy included life cover as well, initially for £50,000. I am 65 years old. I recently received correspondence from them informing me that my life cover was reduced to £18,000 from the initial promise of £50,000. I am more worried about the zero return on an investment of over £20,000. Please advice me as to what to do.

Thanks in advance.

dunstonh

The policy included life cover as well, initially for £50,000.

This would indicate that it is a life assurance with an investment element. Not a pure investment plan.

I am 65 years old. I recently received correspondence from them informing me that my life cover was reduced to £18,000 from the initial promise of £50,000.

That is because investment returns have ended up lower than the target figures used at set up. The idea of the plan is to provide £50,000 of life assurance and will invest some money in the earlier years which is then used to pay for the increased cost of life assurance in the later years. Once the investment fund has been eroded down to zero, the sum assured needs to reduce (or premiums need to increase to keep the £50k).

If you were really really lucky and investment returns had been consistently good, then there was the potential for a couple of thousand pounds at the end. Many also had the option to adjust the sum assured mid term so you could have the life assurance when you needed it and then when you didnt you could reduce the sum assured and more would go into the investment element providing you a lump sum.

brewerdave

Sounds appalling ...is there a case of misselling here??
When my much derided "mortgage"endowments matured a couple of years ago, we had paid in considerably less per month,with included life cover on both of us for £45k ...and still got ~ £32k payout.

sandsy

On these contracts, each month, units are cancelled to pay for life cover.
As you get older the cost increases as the risk of dying increases.
If the investment growth on the funds isn't large enough to cover the increasing cost, the value of the funds falls.
This will carry on unless you increase the premiums or cancel the life cover element.

dunstonh

Sounds appalling ...is there a case of misselling here??

Anything can be mis-sold. However, the product type is typical of the era it was bought. Most life assurances in the 80s and early 90s had investment elements. The product is obsolete and has been for 20 years. However, that is not a mis-sale reason. They could only issue what they could issue at the time.

When my much derided "mortgage"endowments matured a couple of years ago, we had paid in considerably less per month,with included life cover on both of us for £45k ...and still got ~ £32k payout.

That is because your product was an endowment policy. This is not. This would have had a lower monthly premium than an endowment as it's aim was never to provide a lump sum at the end.

bigadaj

I can see the type of policy but that's horrendously expensive for life cover isn't it, particularly given how much that was in real terms when the policy started.

RRS

Horrendously expensive indeed. Should I keep on paying or should I discontinue the payments?

RRS

thank you guys
the financial advisor who sold this product told me that I would get minimum £15000 at the end of the term which matures in 2017. He told that they have got the best financial team and agreed for 50000 pounds life cover with investment. I was not explained properly. What do i do now? Wasted all my money and got nothing. Should I stop the payments? Please advise.

The product is called 'Investment and Protection Plan', can the 'protection' element in it be interprated as 'PPI'. At least I will get some of my money back that way as I was never told that the investment included Personal Protection and whether it was optional or compulsory.
Thank you in anticipation

RRS

How do i find out whether this has PPI attached

zagfles

RRS wrote: »

thank you guys
the financial advisor who sold this product told me that I would get minimum £15000 at the end of the term which matures in 2017. He told that they have got the best financial team and agreed for 50000 pounds life cover with investment. I was not explained properly. What do i do now? Wasted all my money and got nothing. Should I stop the payments? Please advise.

The product is called 'Investment and Protection Plan', can the 'protection' element in it be interprated as 'PPI'. At least I will get some of my money back that way as I was never told that the investment included Personal Protection and whether it was optional or compulsory.
Thank you in anticipation

PPI is Payment Protection Insurance. The "protection" in your plan seems to be life insurance not payment insurance.

It sounds like you've been mis-sold the plan though. It sounds like the sort of plan that pays massive commission to the advisor who sells it - a bit like an endowment (where typically the first 2 years premiums go in commission!) but maybe worse! Loads of dodgy "advisors" who were only eyeing the massive commission sold this sort of rubbish back in the 90's.

You might have a claim for mis-selling, friend of mine was sold a pension about that time and got mis-selling compensation, even though he wasn't actually lied to. Not really sure how to go about it though - maybe first stage write to the advisor/firm who sold it to you?

dunstonh

I can see the type of policy but that's horrendously expensive for life cover isn't it, particularly given how much that was in real terms when the policy started.

Life assurance is dirt cheap nowadays. However, in the 80s and 90s it was expensive. AIDs was still a major concern.

the financial advisor who sold this product told me that I would get minimum £15000 at the end of the term which matures in 2017. He told that they have got the best financial team and agreed for 50000 pounds life cover with investment. I was not explained properly. What do i do now? Wasted all my money and got nothing. Should I stop the payments? Please advise.

A 1993 sale would have had illustrations at example rates and the risk warnings that you may get back less than that. So, on paper, they have evidence to counter your allegation unless you have that in writing. 20 years after the event, the documentation will be the key thing in deciding this. it should also be noted that in 1993, most of these plans had historically gone on to provide a surplus. So, being told something was possible and had been achieved is not wrong unless you are told you WILL be getting that. However, proving you were told that is always the problem.

The plan is obsolete, typically rubbish and you wouldnt want one if you can help it when you look at todays options. However, that doesnt make it mis-sold. However, it may have been mis-sold. Problem is that a half decent audit trail should be able to counter any complaint. If the audit trail is weak then the complaint may succeed. There are plenty of genuine and correct sales that result in successful complaints when they shouldnt (Because of poor audit trails) and there are plenty of badly sold sales that get rejected on complaint because there is no evidence to support the complaint.

How do i find out whether this has PPI attached

it doesnt. Life assurance is issued by life and pension companies. PPI is issued by general insurance companies. You cant have PPi on these plans.