Lloyds Bank Lifetime Security Plan

Snoopy272

HI
After some advice

Some elderley relatives took out a Lifetime security plan back in 1996 with lloyds, the policy has since been brought and taken over by scottish widows.
Basically they are paying £45.72 a month to have a policy cover of £7,000 they have paid well in excess of 9,500 into this policy but that is there cover amount. Scottish Widows have since written to them giving them 2 options.
1) Maintain current sum assured (7k) and increase monthly premium to £102
2) reduce sum assured to £4500 and continue to pay $45.72 a month
or if they wanted to severe the policy they would get £1,500.
This sounds ridiculous to me and i think its absolutley not acceptable they are both in there 80's.

Can anyone help with this or where do i start

Quentin

Their offers are the best they will get. These policies are well known for their poor value.


All you can do is make sure your relatives appreciate the choices open to them.

Snoopy272

could it be a case of mis sold ?

Quentin

Who can say from what you tell us.

dunstonh

This sounds ridiculous to me and i think its absolutley not acceptable they are both in there 80's.

If they no longer want it then cancel it.

could it be a case of mis sold ?

On what basis do you think that?

The old Black Horse Life LSP is a whole of life assurance with reviewable premiums. From memory first review was after 15 years and then 5 years thereafter. It is investment backed and reliant on investment returns. The level of life cover vs investment amount could be set to different levels depending on objectives.

These types of plans were common place up until the mid 90s. Then they largely went obsolete. They can still be bought today but its a niche market. Most people have moved to term assurance for their needs or non-investment linked whole of life assurance with guaranteed premiums (for those with a whole of life need).

Products go out of date. Financial products are just like most retail products. Some age well. Some age badly. Some can be replaced and some just are not needed any more. None of that makes it mis-sold.