Sun Life Over 50s Plan

GTilly

Hi All, I have just discovered that my Mother took out an over 50s plan with Sun Life 38 years ago paying £40 per month and is still paying at the age of 88. She has paid in over £18,000.00 pounds and will receive just £3000.00 when she dies. Is there anything I can do as this seem like a complete misleading Insurance policy aimed at the most vulnerable in society. Has anyone challenged this type of policy with FOS?. Any advise would be welcome.

Sandtree

If she is 88 now and bought it 38 years ago it would mean she was exactly 50 when she bought/ was sold the policy. Why is a 50 year old automatically the most vulnerable in society? Most insurance company executives would probably fall into that group.

No questions asked insurance of last resort is typically poor value but is intended for those with no other options. You'd really need to ask your 50 yo mother why she decided to buy it then.

Regulations have also changed a lot in 38 years but almost exclusively the apply on a go forward basis and not retrospectively... It is however a non-advised sale and so for them to question her on if its still appropriate for her to keep the product is likely to breach their license. 

dunstonh

Is there anything I can do as this seem like a complete misleading Insurance policy aimed at the most vulnerable in society. 

How was she vulnerable in 1984?
1984 predates financial services regulation. 

I am also pretty gobsmacked that a £40pm premium for an over 50s plan in 1984 was an option. I cannot remember when over 50s specific life insurance became available but I thought Sun Life were doing industrial branch polices back then and those had small premiums (not £40).    A £40 premium would be more typical of ordinary branch policies such as whole of life assurance.    

In 1984, if someone was paying £40pm to a pension, that was considered a high amount.  £40pm for a funeral expenses plan was typically in the under £10pm range.

I did some whole of life plans in the late 80s for people around that age and £10 got you about £20,000 cover and was typically investment backed (so you got the higher of the value or the sum assured).

So, are you sure about the date and type of plan it is?

    Has anyone challenged this type of policy with FOS?

How would you challenge it?   Who exactly would you challenge?
If it was sold by a broker, then it predates regulation and you don't get access to the FOS.  Chances are the broker no longer exists but they would reject the complaint as pre-regulation.
A Sun Life rep may have sold the policy but these types of plans are usually sold through mailshots and advertising where no rep is involved and the consumer makes all the decisions.   

Aretnap

Why did she buy it in the first place. I mean, with all due respect you wouldn't need advanced maths skills to work out that a 50 year old paying those premiums for that payout will pay far more than they can ever claim, if they live to anything resembling a ripe old age. Did she think there was a reason why she wouldn't live to a ripe old age? (The main use for these policies is for people with serious health problems, who can't get a standard life insurance policy)? Or was there some reason why she couldn't do the sums?

As above there isn't really an obvious route to lodging a complaint about a policy this old. And even today if it was a non-advised sale the onus would be on the customer to ensure that the policy is appropriate for their needs. So the main thing she has to consider is what to do about it now - keep paying the premiums so her estate can collect the eventual payout, or cancel and lose the payout but pay no more premiums.the answer to that question depends mostly on how likely she is to live another 6-ish years, but also on whether there's a clause to say that once she gets to the age of (say) 90 she can stop paying premiums but keep the policy - some policies have a term along these lines so do check. 

susansue

A relative of mine successfully challenged one of this type of policy, one that had a 'with profits' investment element as mentioned above. She was promised "A useful nest-egg" for her heirs. She complained when the cash-in value of the investment was ridiculously low after years of monthly premiums. The company eventually settled by returning her payments less the cost of life insurance over the period.

dunstonh

susansue said:

A relative of mine successfully challenged one of this type of policy, one that had a 'with profits' investment element as mentioned above. She was promised "A useful nest-egg" for her heirs. She complained when the cash-in value of the investment was ridiculously low after years of monthly premiums. The company eventually settled by returning her payments less the cost of life insurance over the period.

The relative of yours didn't have the type of plan the OP is referring to.  Although ironically, that is the type of plan the OP's mother should have had.  Albeit set up on an appropriate basis (lots of options on how they could be set up and not all turned out good but some did.

Brie

MiL has a similar issue with a funeral plan.  Both she and FiL took them out when they were 60ish.  Not a huge amount monthly - think it was £4 each per month and promising to pay "well" towards their funerals.  Well when FiL died 30 years on there was £250 available to be paid but only if the funeral was bought through a particular firm. So £48 a year for 30 years is well in excess of £250!  MiL is still paying to hers at 95.  We'd need her to cancel it and it makes sense but isn't worth the upset.

csgohan4

if one is buying these policies for funeral expenses best to consider putting it in a savings account/ premium bonds and tell someone it is there for probate 

Now a days over 50's plans are plans of last resort imo

dunstonh

Now a days over 50's plans are plans of last resort imo

You are not wrong.   ALthough not just nowadays but for some decades that has been the view.

csgohan4

dunstonh said:

Now a days over 50's plans are plans of last resort imo

You are not wrong.   ALthough not just nowadays but for some decades that has been the view.

dunstonh said:

Now a days over 50's plans are plans of last resort imo

You are not wrong.   ALthough not just nowadays but for some decades that has been the view.

IMO their for people who look at life assurance late and procrastinated so long they can't afford to get bog standard life assurance. 


I bought my life assurance more than 6 years ago when it was 'cheaper' and I was younger with no medical issues. If I bought it know, it will almost certainly be more expensive and I understand their risk appetite is now higher for underwriters.

I've seen people who prev had cover for someone with breast cancer more than 10 years diagnosis, can't get cover or have a massive uplift in premium. Even though they easily got cover the year before covid. So sad but also shows that underwriters can change their criteria just as quick as their premiums.