Some advice/help with an Eagle Star(Zurich) claim

danele

Hi, 
I'm hoping for some advice from someone that knows more than I do regarding life insurance. An elderly relative of mine recently passed away and they had a whole life policy with Eagle Star who are now under Zurich. The person's policy started in 1991 and they have paid £18 every month since into it, the policy states, (this is exact)

"Whole life assurance without profits

Sum assured - An amount equal to 150% of the total premiums due up to the date of death of the life assured, increasing to £4,178 on the 10th of April 1993"

Now my initial understanding was that this would mean the payout would be150% of the amount he has paid them which he has paid in over £6,000 however they are telling me his policy is worth £4,178 and that's what they will pay which to me seems wrong especially how much he has paid in. When I queried this with the insurer I was told that the 150% of premiums due is only payable in the first 2 years of his policy but I'm scratching my head as to where this is stated?

Thank you to anyone that can offer some advice.

Sandtree

Its not brilliant wording but their interpretation is the most sensible... before the specified date its return of premiums with a 50% bonus once you hit the specified date the sum assured kicks in and stays there ever more. Hence the its 150% premiums and then increases to the sum assured on 10 April 1993

If you try to take the interpretation that it will always be 150% of premiums, which I assume you are trying to get, what can the comment about it increasing on 10 April 1993 possibly mean?

danele

They told me that the part you reference about it increasing on 1993 is how you are to get to it only been on the first 2 years. I just found it quite misleading and I k ow my relative did for many years as they had a different view on how there policy would pay. It's quite disgusting that they will have paid in a decent amount more and not even get back the amount paid in I imagine they could have cashed in and got more when alive!

Thank you for you're time and confirming what they told me I just wasn't going to take what Zurich told us as final as I'm sure they aren't interested in doing any favours for people claiming.

Sandtree

As someone who reads contracts and (re)insurance policies fairly regularly I personally would say its unclear rather than misleading but I accept I dont come at these things from a normal angle. The main point for me is that there is no other reading where the "increase to" bit makes any sense/relevance.

Ultimately if you are unhappy you can always log a complaint and escalate as appropriate (though I dont actually know who has the right to go to FOS in relation to claims on life insurance)

naedanger

I think it is, at least arguably, misleading.

I do not think it unnatural to read it as you will get at least 150% of your premiums and more than that after 10th April 1993.  If you read it like that then yes, it is contradictory, but not obviously contradictory at the point of sale - you would not necessarily realise if you live long enough the amount quoted actually becomes less that 150% of your premiums. But if it is contradictory it should be interpreted in the customer's favour.

If you are unhappy you should make a formal complaint, stating your elderly relative believed the policy would pay at least 150% of the premiums paid.  At the last stage of their complaint process you should be able to take your complaint to the Financial Ombudsman Service. (Then if nothing else you will get an independent view of the matter, and if they agree with you then you should get the amount increased.)

Old_Lifer

It is a whole life assurance with a sum assured of   £4,178.    Presumably initial commission on the sale of the policy was spread over  the first two years so the Life Office was reducing its risk  to just a return of premiums plus 50% during that period. 

The wording is not that unusual  and since  the policy would have been taken-out in April 1991,  saying that the sum assured would be a return of premiums on death until April  1993 and  thereafter the sum assured  would  INCREASE  to  £4178  does in fact indicate that the return of premiums only applied to the first two years.

Unfortunately the policy is with-out profits so the amount payable on death remains £4178 today.   A typical with-profits  policy may have cost perhaps 50% more  but with annual bonuses added to the sum assured each year and a sizeable terminal  bonus the pay-out on death could be expected to be far in excess of £4178.

Sadly,  I cannot see any point in complaining about the policy wording.