Massively underperformed Life Insurance Plan

NCC-1701

KK14 wrote: »

@Old Lifer this is what I would have thought that my mum & dad would have said ok as want life cover for x amount so what’s the premium for that?

My mum was only paying £6.00 a month into it so it wasn’t a fortune each month but it was paid every month for 27 yrs! She took out the policy in 1992.

That's the nature of the beast...some people pass away early and are subsidised by those like your Mum who live longer and pay more in.

Sea_Shell

If your Mum was paying £6 per month for 27 years, that's only £1944. Where do you get £7000 from???

Old_Lifer

So the premium was £6 per month not £20.


Given the type of policy, the sum assured of £723 appears fairly normal.

Aretnap

Sorry for your loss.

Most life insurance policies involve answering detailed questions about your health and medical history, which the insurer uses to estimate your life expectancy, and bases the premium on that - people with major health problems will pay higher premiums (if they can get cover at all) than people who are in good health for their age.

'Over 50s' plans are a different beast - the insurer tends not to ask any questions about your medical history and simply applies a standard premium based on your age. The premiums tend to be much higher for a standard policy because the insurer has no way of knowing if you have stage 4 cancer when you sign up - so they will be based on the presumption that you are likely to be in poor health and have a limited life expectancy. This makes them poor value for money for someone who is in good health - they are really just a last resort for people who can't get a standard policy.

If your mum lived for 27 years after taking out the policy she was obviously in reasonably good health when she took it out, so she would almost certainly have been better off with a standard policy than an over 50s plan (in spite of the name, it is perfectly possible for someone over 50 to get a standard policy). If she bought it through an adviser then the adviser should really have pointed this out to her - but of she bought it off her own back in response to say a newspaper advert then she would be unlikely to have any comeback - with a non-advised sale is the customer's responsibility to check that the policy is suitable for them. And as regulation was much laxer in 1992 than it is today, there might not be much comeback even if it was an advised sale

lisyloo

Can an estate (presumably an executor) make a mis-selling case?
I think there’s virtually no chance with decades old cases but I’m curious as to whether it’s even a possibility when the client is deceased.