Life Insurance what should I do?

AlienSkin

A few monts ago I requested help from members regarding a problem with a life policy I have. The policy was taken out through my bank over a fixed period. Which would generate £80,000 upon death!

Or so I thought, life expectancy of a male, non smoker/drinker, baring fatal injuries etc, is well in to their 70's & 80's if not longer!

It would now appear that the policy dies, excuse pun, on my 70th birthday, which would mean that I will have paid in the region of £15,000 :eek: for nothing. :mad: :mad: .

The advice from members, contact the bank and tell them you want to cancel the policy and get out.

Simple, Oh no, the bank says no can do!! :mad:

Question: Can the bank do this. What is the action I should take? As the money I pay for this policy can be put to better use, with possibly the same, or, better results.

Advice and assistance would be appreciated. .

Regards,

AlienSkin.

dunstonh

It would now appear that the policy dies, excuse pun, on my 70th birthday, which would mean that I will have paid in the region of £15,000 :eek: for nothing. :mad: :mad: .

And your point being?

The advice from members, contact the bank and tell them you want to cancel the policy and get out.

Really? What happens if you die before then?

Question: Can the bank do this. What is the action I should take? As the money I pay for this policy can be put to better use, with possibly the same, or, better results.

It's unusual nowadays but there are still some loans that require life cover as a condition of the loan. One assumes you have a liability of this type as that is the only reason the bank can stop you cancelling the direct debit.

You do not have to have it with the bank though. You can get it cheaper elsewhere. Plus, the terms must match the bank's liability. So, chances are the liability finishes before age 70 so that will need amending.

If it isnt required against a liability and the bank is saying no, make sure there is no confusion. The bank can only cancel a direct debit. It cannot cancel the policy. You need to go direct to the life company to do that.

Also, make sure you are cancelling for the right reasons. If you die before 70, will you have dependents that will be financially worse off? 1 in 5 men will die before retirement. Odds are that you will make it but 1 in 5 is not worth the risk for such a small premium.

lisyloo

Or so I thought, life expectancy of a male, non smoker/drinker, baring fatal injuries etc, is well in to their 70's & 80's if not longer!

That's the AVERGATE yes, but some people do die before that time.
I have heard that 20% die before retirement (can't give a link I'm afraid).
The majority won't be able to claim but the insurance is providing you will peace of mind up until 70 that IF you do die, your dependents will get some money.
It's a gamble for you but the insurers will have tables and will know exactly the statistical figures for gender, smoking status etc.

It would now appear that the policy dies, excuse pun, on my 70th birthday, which would mean that I will have paid in the region of £15,000 :eek: for nothing.

It's not for nothing.
Some people will die before this age and will be able to claim.
It's might even be you (none of us know).

The advice from members, contact the bank and tell them you want to cancel the policy and get out.

Where did that advice come from?
Do you have dependents?
It's not clear to me on the information provided whether this is suitable for you or not.

You need to cancel the policy with the company you took it out with. Unless it's a condition of a loan there is no reason why you shouldnt' be able to cancel, but maybe you are talking to the wrong people.

Advice and assistance would be appreciated.

What dependents do you have?
What "death in service" benefits does your employer provide?
What assets will be available on your death (include lump sums from pensions in here)?
What loans do you have?

Then we can have a stab at whether you might need this policy.

If you decide to cancel then cancel the DD at the bank and the policy with the life company.

P.S. Sorry about the fonts. Haven't got the hang of that yet.

AlienSkin

I do not want to go in to too much personal detail, however in response to your questions:
The policy is the banks own "Level term Assurance."
It was taken out to cover a re-mortgage of the house, in case of sudden death.
I am now in a possition to pay off the mortgage early, hence the cancellation.
I have no dependants.
I am not employed, having been medicaly retired 20yrs ago, work related.
The residue of my estate will be more than sufficient to cover any expense post death.

Thanks in anticipation,

AlienSkin.

lisyloo

If you have no dependents then there isn't really a need for this cover EVEN if you have a mortgage.
In the vast majority of cases the house value will pay off the mortgage so there is no need for it.
As house prices have been rising for at least 10 years then most estates would have excess equity after paying off the mortgage.

Have you thought about bringing a mis-selling case as you could argue there was no need for this policy at all.

Why did you think it paid out £80,000 at the end?
Was this a mistake on your part or did the advisor give you any information (verbal or written) to make you believe this.

I'm not asking to score points about whether you were right or wrong but it could affect the merits of any mis-selling case as it sound like you thought you were getting an investment and not an insurance.

AlienSkin

This is were I show my naivete: I requested that the policy cover the cost of the mortgage, plus a little extra, to cover ongoing debts at the time of death.

I was advised that the policy would cover that ammount, which is what I wanted. The policy documents states "Sum Assured" for the ammount requested.

Are you now saying that the policy will not pay out that sum? That is the only reason I took out the posicy In the first place!

Regards,

AlienSkin.

lisyloo

Are you now saying that the policy will not pay out that sum?

From the information you have provided this policy will pay out £80,000 if you die before your 70th birthday.

If you are still alive on your 70th birthday then you get nothing.

I am not quite clear on what your complaint is.

If you are now in a posistion to pay off your mortgage then do you still need it?