To accept or not to accept? Please advise

hilla_2

My husband and I took out a whole of life insurance policy in May 1990. We were 33 and 42 at the time and were told that if we pay £54 a month for life we would get £54000 when one or other of us died. I wasn't that financially savvy at the time (no MSE around then) but I did the maths and thought it was worth it. No mention was made of reviews or increased premiums just if you pay £54 a month for life one of you will get a pay out on the others death.

We moved abroad in 2009 and a friend said we could have our British post sent to his address. I came home in 2010 for a holiday and found a letter from Phoenix saying that if we didn't increase out payments to £70 a month then our cover would be reduced to £41000. If they didn't hear from us within a month they would assume we didn't want to increase and they would keep the payments the same but reduce the payout to £41000. I rang them as soon as I opened the letter and explained that we were living abroad and hadn't received the letter and asked could I increase the payments? They flatly refused. So we reluctantly accepted that we would now only get £41000 when one of us dies.

A month ago I received another letter from Phoenix saying as I hadn't responded within one month they would reduce the insurance cover to £21000. I rang them and explained that I hadn't had the 1st letter and could they tell me the terms. Basically they had reviewed our policy and decided that if we didn't put the monthly payment up to £123 a month then they would reduce the policy to £21000. After due consideration we decided that we couldn't afford this and reluctantly decided to keep paying the £46 a month but now for £21000.

I was asked if I would like to make a complaint for mis selling. I said that I would as we were never told that the policy would be reviewed and that an increase in premiums may be necessary.

I received a phone call 8 weeks later from the person looking into the case and was asked various questions. She rang me 2 days later and said that she had upheld our case that we were mis sold the policy and she was willing to reduce the monthly payments to £39 a month with a guaranteed payment of £32000 on one of our deaths and no more reviews. She also want to offer £100 compensation for conducting the review 4 weeks later than promised and £50 for the distress it had caused us for the mis selling. I said that I felt that this was wholly inadequate as it had caused us a lot of stress knowing we had been basically conned and had in fact lost £22000 from whet we were originally promised. Most people would be stressed if they lost £22000! She had a word with her boss and rang me and said they would up the offer to £500.

My question is have others had similar offers? Does this offer seem reasonable or should I go to the Ombudsman?

jonesMUFCforever

To claim one of you would have to die!
So you have not lost £22k IMO

Before replying to them visit an IFA work out what you exactly need now and take it from there.

dunstonh

Most people would be stressed if they lost £22000!

You have not lost £22k

My question is have others had similar offers? Does this offer seem reasonable or should I go to the Ombudsman?

£500 goodwill gesture is right at the top end of what you expect from the FOS. Plus the outcome seems very reasonable. Why are you not happy with it?

rs65

As you knew of the issue in 2010, you might be time barred

http://financial-ombudsman.org.uk/faq/businesses/answers/before_we_get_involved_a7.html

hilla_2

jonesMUFCforever wrote: »

To claim one of you would have to die!
So you have not lost £22k IMO

Before replying to them visit an IFA work out what you exactly need now and take it from there.

I SAY 'LOST' £22000 because if there had been no reviews one of us would have got £54000 at some point and now we will only get £32000.

hilla_2

dunstonh wrote: »

You have not lost £22k



£500 goodwill gesture is right at the top end of what you expect from the FOS. Plus the outcome seems very reasonable. Why are you not happy with it?

If that is the case then I am very happy!

jonesMUFCforever

hilla wrote: »

I SAY 'LOST' £22000 because if there had been no reviews one of us would have got £54000 at some point and now we will only get £32000.

Have you at any time got quotes for life cover - is there a need for whole of life when say in your 60's you might be debt free?
As I said previously which one of you is prepared to die so the other can claim the policy??

hilla_2

jonesMUFCforever wrote: »

Have you at any time got quotes for life cover - is there a need for whole of life when say in your 60's you might be debt free?
As I said previously which one of you is prepared to die so the other can claim the policy??

I was 30 and my husband was 39 when we took it out. I didn't really know much about insurance then. just thought it would be a good idea if one or other of us had some savings when the other died. Don't think we'll have a choice as to which one it will be somehow!