My Dad cancelled his life insurance just before he passed away...

PersianCatLady

takman wrote: »

The OP doesn't say that at all!. It says he cancelled the life insurance because he had paid off his mortgage..

No he didn't he said this "however, he did pay off his mortgage in August and I think this must have been the reason why he cancelled the policy".


All that the OP know for sure is that the mortgage paid on August and that the life insurance policy was cancelled too.

takman wrote: »

Plus how many policy's do you know of that would pay out when they are cancelled

Lots of older style life insurance policies actually have a "cash-in" value.

Aretnap

chucknorris wrote: »

Thanks, I never knew that, although I won't be rushing out to do that, as the opportunity cost would be more expensive than the insurance itself. I think my car insurance is only about £220, so on £500k that would only be a return of 0.044%.

I wonder if anyone has ever done that, maybe for an extremely expensive car?

I believe some big companies/organisations do it. The theory being that if you have a big enough fleet of cars you know to good approximation how much you're going to pay in claims each year, so you might as well pay it yourself rather than pay an insurer to pay it for you. Possibly they top it up with a non-RTA compliant policy which covers them against the risk of a catastrophic multimillion pound claim, but not run of the mill accidents.

Not sure that anyone would want to self insure for a personal car in practice. Maybe a very rich person who was otherwise uninsureable... thinking of someone like a footballer with multiple drink driving convictions.

antrobus

Aretnap wrote: »

I believe some big companies/organisations do it.....

They would tend use a captive insurance company.

Aretnap wrote: »

...Not sure that anyone would want to self insure for a personal car in practice. Maybe a very rich person who was otherwise uninsureable... thinking of someone like a footballer with multiple drink driving convictions.

The kind of people who do it are both rich, have multiple vehicles each of which probably costs as much as your house, and don't spend the entire year in the UK.

ThinkingOutLoud_2

chucknorris wrote: »

These funeral cover schemes that you see Parkinson advertise on tv end up with most people having paid more in, than the cover they actually receive, and if they cancel they no longer have the cover.

The Op was interested in life insurance.

I totally agree with you - Funeral Plans are rarely good value, although not all work quite as you say now. Certainly for a 16 year old it makes even less sense as they will likely need different cover / levels as they progress through life.

I think all insurance works on the basis that if you cancel it, the cover will end.

ThinkingOutLoud_2

Aretnap wrote: »

I believe some big companies/organisations do it.
...
Maybe a very rich person who was otherwise uninsureable... thinking of someone like a footballer with multiple drink driving convictions.

Absolutely - businesses and I think some super rich with fleets of cars have done this a lot historically exactly as you say (http://www.businesscar.co.uk/analysis/2010/insurance-10-fleet-questions-answered)

Part of the underlying thinking is why give the car insurer their profits, if you self-insure and can absorb the swings and roundabout of losses year on year, surely you come out on top. But it is not so easy as it sounds.

Captives are as said the route to the same with some advantages e.g. that a skilled motor insurer with economies of scale fronts the claims handling, etc. and the captive takes the part / proportion of the risk desired.

However as many car insurers do not turn a pure underwriting profit every year (or even often or ever) - the attractiveness may has diminished in recent years. But then the fleet manager can do all sorts of things to improve the driving ability / behaviour of the fleet drivers.

ACG

kingstreet wrote: »

You can avoid that by depositing £0.5m with the Bank Of England, if I remember my CII exam from 1986.

Yep. Still in the RTA;-

How do you remember this stuff? I did my exam about 20 years after you and can not remember half of what was in it...Thats assuming I knew half of what was in it to begin with.

Going back to the OP, if the trustees never signed off on the cancellation should the policy have been cancelled? If the OPs father had cancelled the DD and in turn the policy cancelled that is a little different. But I think I would try and push it.