Life Insurance

AJCALLY1963

my my dad is 85 and still in relatively good health . He took out a life assurance policy with a company called Phoenix life in 1990
the amount insured for was £4500
upon death. Basically money for his funeral .
anyway he’s been paying £30 a month so as you can imagine there’s £9000 the insurance company has of his well over the policy amount  he’s insured for on death . 

He asked for the overpaid amount to be refunded and has been told no and moreover if he stops the direct debt his insurance will be null and void 
this seems crazy to me . I’d be grateful as how to approach this issue with Phoenix 
it all appears a bit of a con 

kind regards in advance 

Old_Lifer

You need to  read the policy document  to establish what type of policy this is  so that  we can give you an explanation.

Take a look at the policy schedule.  This will state when the sum assured is payable.   Does it say payable  'on death'  or  payable  'on death  before.......(date)'    or does it say   payable  ' on......(date)   or on previous death'    ?

Is there any mention of  'with profits'    or  'units'.

For an over-50's type  policy,   I would expect the monthly premium of  £30   for a 55 year old   to secure  a sum assured of around twice  that  mentioned in your  post.

dunstonh

He asked for the overpaid amount to be refunded and has been told no and moreover if he stops the direct debt his insurance will be null and void 

Quite correct.   You dont get money back just because you haven't died.   Those that live longer pay more in premiums than those that have a short life.

this seems crazy to me 

Do you ask for your home insurance or car insurance premiums back each year?

it all appears a bit of a con 

Its not.

the amount insured for was £4500

Was it £4500 and with profits or just a level £4500 with no investment element?

AJCALLY1963

Hi there. I’ll grab the policy folder when I visit my dad tomorrow morning and will confirm the wording back to you . Many thanks in advance 

AJCALLY1963

Hi all 
sorry for the delay
the initial policy was taken out in jan 2000 with Cornhill , (Britannia unit linked assurance Ex Allianz) 
£30 a month 
amount for death benefit
lump sum £4528.00

So he’s been paying £30 each month for 20 years 
My dad is 85 now 
still relatively healthy
is there anyway he could perhaps take the sum and convert it to a ISA or a better savings scheme 

this policy was taken out primarily to provide funds towards funeral costs 

kind regards 

dunstonh

Insurance is much cheaper today than it was 20 years ago.   Life expectancy has increased.   So, the premiums reflect the era.

is there anyway he could perhaps take the sum and convert it to a ISA or a better savings scheme 

You mention it was unit linked.  But you didnt mention what the surrender value is.   Have you found that out?

Old_Lifer

Initially,  this appears to be a unit-linked whole life policy.

You will often find   the  words  ' the policy is a whole life assurance'   near the beginning of the policy document.    If not, you  can establish the type of policy by looking at the  'sum assured' and 'premium'  sections of the policy schedule.   If the schedule  says   'Sum Assured (or  Amount payable on  Death)  £4528 '(and says nothing else)  and if it says  'Premium  £30 per  month' (and says nothing else) it is a whole life policy.     If it is a unit-linked policy,  it would be normal for an annual statement to be issued.  

If it is a whole life policy,  it is important that  you look through that part of the policy which deals with premiums and in particular you should look for any mention of the premiums being  'reviewed ' or 'reviewable.'     If the policy is reviewable, although  your dad appears not to have been asked to pay a higher premium so far ,   that may simply be down to the low sum assured   and there being sufficient value in the policy  to accommodate the ever rising cost of the life cover.    A unit-linked whole life policy would have a surrender value   but the   increasing  cost of the life cover would increasingly eat into  this.

From your initial post,  it appeared your father took-out the policy in 1990 when he was 55,  which prompted me to comment that an over  50s  plan was unlikely given the low sum assured.   If I understand correctly, your latest post  indicates he was 65 when  he  took -out  the policy,    which  makes  this being  an over 50's type policy  more plausable.