Pearl Life Insurance

vernall

After a bit of help/advice please guys

My Mum and Dad took out a life insurance policy with PEARL 5 years ago which pays out a guaranteed sum upon the first one of them passing away
The policy runs for 25 years @ £25.21 a month
so lets say they both live the full 25 years ,they will have paid in £7563 BUT the minimum amount they are guaranteed to receive is just over £2000 plus there are VERY slight bonuses added each year but this is a couple of quid.
Is it just me or does this policy seem a load of rubbish to anyone else?
They have paid in just over £1500,so they have practically paid for the minimum they will receive but they have to pay this for another 20 years...
Anybody know what the penalties would be for cancelling this policy and how much woud they be entitled to back?
any help gratefully received

dunstonh

This doesnt sound like the Pearl Saver Plan but the Pearl Funeral Expenses Plan.  The Pearl saver plan was withdrawn in 1998 so could not have been started in 1999.   The only savings product Pearl had in 1999 was an ISA.

This plan is a whole of life assurance and not a savings plan.  

Its generally taken to cover funeral expenses.  The payout is sum assured plus bonuses.  Bonuses will always be low as it isnt a savings plan.

If the policyholder survives to age 90, Pearl will cease the premium collections but the plan will continue.

There surrender value is minimal and the sum assured is only paid on death.   The usual surrender value on this plan is a small percentage of the bonuses added only.

payless

deleted my earlier post to avoid confusion

DD knows more about Pearl products than I do -

I was talking more generally , and was put off course by the statement

The policy runs for 25 years @ £25.21 a month

whereas if its a "Whole of Life"with premiums ceasing, then the policy does not have a fixed period.

vernall

thank you very much for your help guys
when you say
There surrender value is minimal and the sum assured is only paid on death. The usual surrender value on this plan is a small percentage of the bonuses added only.
does this mean they could cash it out and hardly get a thing back?
sorry to be thick

dunstonh

Correct, the surrender value is likely to be very very small.

This is not a savings plan but a life assurance.  The bonuses are incidental and not a key part of the plan.  

The original illustration and a copy sent with the policy document would have illustrative surrender values in the early years. Based on a premium of £25.21pm and five years,  I would think you would be lucky to get £150.

DD knows more about Pearl products than I do -  
I was talking more generally , and was put off course by the statement
Quote:The policy runs for 25 years @ £25.21 a month  

whereas if its a "Whole of Life"with premiums ceasing, then the policy does not have a fixed period.

I initially thought Pearl saver plan which is an endowment assurance.   However, the maximum term for one of these was 10 years (on the adult plan).

The only other products that Pearl offered at that time that would offer life cover and bonuses were the Homebuyer plan which is a mortgage linked endowment and the sale of that as a savings plan would be a mis-sale and i very much doubt it would be that and the Funeral expenses plan.  The Funeral expenses plan, if taken out at age 65 would have a 25 year premium term or death whichever occured first.