Insurance cancelled after I've paid the prmiums?

johne53

Good question... my current premium is relatively modest (around £140/annum) although I'd guess that reflects the fact that I've had the policy claim free for maybe 30 years. But even assuming I could find a similar policy these days, to start a new one from scratch (when I'm in my mid 60's) would probably be a lot more expensive (I don't know that for certain of course because I haven't started looking yet).

lisyloo

The product does not make a lot of sense to me.
I can understand why you’d want to protect you income if you cannot work through sickness or accident, but that’s not what you have.
Most people who cannot work for health reasons are not in hospital.

Have you worked out what products you actually need/want?

johne53

The policy offers me £250 per day (while I'm in hospital) if I need to spend more than 2 nights as an in-patient. At the time when I took it out, my dad had spent several weeks in hospital following a mild stroke. It made me realise that if he'd had a policy like this one, the money could have helped his recuperation (or at least helped to make life a bit easier when he came out).


Seemed like a good idea at the time...

Takmon

johne53 wrote: »

The policy offers me £250 per day (while I'm in hospital) if I need to spend more than 2 nights as an in-patient. At the time when I took it out, my dad had spent several weeks in hospital following a mild stroke. It made me realise that if he'd had a policy like this one, the money could have helped his recuperation (or at least helped to make life a bit easier when he came out).


Seemed like a good idea at the time...

If your premium has been £140 a year for the last 30 years so that £4200 you have paid out. If you had saved that yourself then you would have got interest on top and had an amount higher than that now in the bank.

It may have been a good idea at the time but obviously only for the short term because after a few years you should have managed to save up some money yourself for emergencies, so the policy isn't really that useful as a long term product.

I think the root of your annoyance is that you paid all the money and now it's come to an end you realise how much was spent. But that's the nature of insurance and how it works because most people pay more than they get out. Just be happy you have not had to go into hospital.

Just start saving the money instead.

csgohan4

Insurance is a scam when you don't need to use it

johne53

Just as an aside... does this 12 month thing also apply to life insurance? i.e. if someone takes out life insurance in their 30's, is it okay for the insurer to cancel the policy once they reach their 60's?

SonOf

Just as an aside... does this 12 month thing also apply to life insurance?

If you buy yearly renewable term assurance then yes. If you buy level term assurance or decreasing term assurance then no. They are fixed term products where you choose the term at the start.

dawnriser

I too have received a letter from Cigna withdrawing the Hospital Income Plan I have paid into for the last 40 years.
Unlike any of the other services that have been given as examples of annual contracts this plan becomes more valuable with age - and now its impossible to replace. I was 30 when I took out the policy, I am now 70. Who is going to insure a 70 year old with new policy against the risk of a hospital stay?
I dilute it being an annual policy - if it was I would have been sent a a new monthly payment plan each year to account for the increased risk as I got older. Increases have only been around the rate of inflation.
So my complaint is that I have paid year on year for 40 years, without a claim and now, a business decision is made not to offer this policy in the future, leaving me without any possibility of finding an equivalent policy.

SonOf

So my complaint is that I have paid year on year for 40 years, without a claim and now, a business decision is made not to offer this policy in the future, leaving me without any possibility of finding an equivalent policy.

I would not expect that complaint to succeed as it is a commercial reason and the FOS will not rule on commercial reasons as long as it is not discrimination. This type of plan is not a protected plan that cannot be cancelled by the insurer. So, no T&C has been breached.

johne53

dawnriser - in the financial services industry, loyalty, decency and even contracts are all just there to be ignored and exploited. Earlier, I described how I once spent decades paying into an endowment scheme. Then (just one month before it was due to end) the endowment provider told me that they'd be reducing my payout by applying something called a Market Value Reduction. I spent weeks reading through the contract and every document I'd ever received from them - but there wasn't a single word anywhere about Market Value Reductions.

I complained to the regulator and even the regulator agreed that the provider had no documentary justification for applying the MVR - but the regulator found in their favour on the basis that Market Value Reductions were "now commonplace" in the industry. In other words, if it becomes "commonplace" for finance companies to cheat their customers, that's somehow deemed as legitimizing the practice.