Surrender Abbey Life: LivingAssurancePlan

Teddy67

I have an Abbey Life "Living Assurance Plan" - today I received my Annual Statement. My life cover over the years has reduced and now stands at around £15K. There is a surrender value of approx £3.4K (under managed series 4) - so I am very tempted to just cash it in - as I expect that if I ever actually needed life insurance (it covers critical illness) I expect there would be a loophole somehow...

It has something called Waiver of Premium to age 60. Does this mean if I carry on paying until I am 60 (another 10 yeras) - I will keep my Plan but not need to pay any more premiums?

I pay £15 a month for this cover.

Does anyone have any thoughts on this please.

Many thanks.
Helen

Weighty1

Waiver of premium means that if you are ill and unable to work for longer than a specified period, after that period has ended the insurance company will maintain the cover free of charge until you either return to work, a claim is made or the policy term ends.

Most insurers have excellent claims histories and don't try and exploit loopholes. Death claims are paid in around 98% of cases and critical illness claims around 92% of all cases. The vast majority of claims which are declined are either due to the client not understanding what they were actually covered for in the first place or due to some major non-disclosure when applying, such as the applicant lying about their medical history.

Whether you keep it or cash it in should be dependent on your personal circumstances and whether you need to take care of someone financially in the event of your death/suffering a critical illness. That said, £15,000 isn't a very large sum assured so it may be best to review this along with an adviser to make sure you're adequately covered, if you do indeed need it.