Whole Of Life Policies - Don't expect your money back -Why Not?

peterbaker

(withdrawn)

dunstonh

Whole of life plans often carry an investment element and that is probably why they are saying you will get none or very little back. With a pure protection term assurance you dont have an investment element and it works under different rules and that statement wouldnt apply.

dunstonh

Quite a lot of whole of life plans (WOL) are classed under the designated investment rules rather than the pure protection rules. This means compliance requirements are different.

The reason for this is that many WOL plans have part of the premium going off to buy units (can be unit linked or with profits). Therefore they accrue a plan value. So, in turn they also have a surrender value. Many of them paid out the sum assured plus bonuses. Some acted in the manner of a decreasing sum assured but with the investment element making up the difference.

Going back a few years, they were often sold as funeral expenses plans as you would have the sum assured when you did, regardless of when that was. However, as the fund value built up to a level that would cover a funeral, you could stop your premiums and leave the fund value there. They used to do that quite nicely. Roughly, a 60 year old used to be able to pay for 20 years and could then cease the premiums.

However, increasing costs of a funeral, diminishing investment returns and increased regulation have made these plans less common from an advice point of view.

Products which have come to the end of their life are often marketed on daytime tv as there is no regulatory come back for mis-selling as they are bought by the individual and not advised sales. So, the insurance companies can market expensive, poor quality products at a section of the public who are generally not as clued up on financial matters as others and have no real come back providing their literature points everything out. AXAs "carol smilie" bonus savings plan is a good example of a crap plan that fits that category perfectly.

payless

dunstonh wrote:

AXAs "carol smilie" bonus savings plan is a good example of a crap plan that fits that category perfectly.

but doesn't the "free " parker pen ( for requesting an illustration) and Bush DVD make it good value - and of course you have the fact that they kindly increase the premiums each year for you !


How many DVD's can you buy with £500,000 http://www.fsa.gov.uk/pubs/final/axa_21dec04.pdf

dunstonh

Well it does appear that way doesn't it?