Phoenix Life Insurance Policy - HELP NEEDED Please

gavinrodda

Hi Everyone,

Can I get some advice on how to deal with my parents Joint Life Insurance Policy that they have been paying into since 1988 at a premium of £10pm. Originally the policy was with Hill Samuel and the pay out in the event of death back in 1988 was set at £8791.00 but Hill Samuel got bought out by Phoenix Life and over the years they have reduced the pay out figure whilst my parents have been paying in £10pm still. They have reduced the sum to a figure of £1267.00 and stated that it was reduced on instruction from my parents when reviewed back in 2014. I have contacted Phoenix Life on 2 occasions now to ask for all documentation to show where my parents have agreed to the reduced sum and I have not been given any supporting documentation apart from this cover letter that I have attached.

My father passed away recently on 17th June 2022 and I have been left dealing with all the paperwork and finances to help make things easier for my Mum. She has the original Hill Samuel Life Insurance Policy that they signed and recent statements from Phoenix Life but there is no paperwork anywhere that they have signed or agreed to, to reduce the pay out figure.

I find it disgusting that between my mum and dad, they have paid in just under £24k into this life insurance policy since 1988 and all my mum will receive is £1267.00.

Which is my best way to fight this for my mum to get the pay out that both her and my dad agreed to when signing up for life insurance?

Any help and advice will be greatly appreciated.

Thank You

Gavin Rodda

dunstonh

 Originally the policy was with Hill Samuel and the pay out in the event of death back in 1988 was set at £8791.00 but Hill Samuel got bought out by Phoenix Life and over the years they have reduced the pay out figure whilst my parents have been paying in £10pm still.

Hill Samuel has been passed from pillar to post over the years. It has ended up with Phoenix but for most of the life of this policy, it was not Phoenix.   However, who owns them doesn't matter.  The policy terms and conditions still have to be applied.

These plans typically have a period of years where no increases/changes can be applied even if the insurer is suffering a loss.  Normally around 15 years.   Then there are review points after that. Typically every 5 years where, if the premium and investment returns are insufficient to cover the cost of life assurance, the policyholder is asked to either increase the premium or reduce the sum assured (or something in between).

In this particular case, the policy was yearly reviewable.  

Phoenix also picked up a number of these plans where they found the previous owner had not correctly increased them at earlier points when they should have.   So, often the first increase premium/reduced sum assured happened much later than it should have.

I have contacted Phoenix Life on 2 occasions now to ask for all documentation to show where my parents have agreed to the reduced sum and I have not been given any supporting documentation apart from this cover letter that I have attached.

It may not exist as the default option is often to reduce the sum assured if the policyholder does not reply.

I find it disgusting that between my mum and dad, they have paid in just under £24k into this life insurance policy since 1988 and all my mum will receive is £1267.00.

Where are you getting £24k from?
You say the policy was set at up £10pm.   £10pm x 12 is an annual cost of £120.  34 years of £120 is £4080.  

Which is my best way to fight this for my mum to get the pay out that both her and my dad agreed to when signing up for life insurance?

There is no wrongdoing here.   The problem with reviewable plans is that the sum assured/premiums change.  This often means they are cheaper in the earlier years but more expensive if you live longer.  With this type of plan, there can come a point where you end up paying more than you get out.      The type of plan itself was obsolete by around 1995 and the cost of life assurance fell significantly in the late 90s as the increases due to AIDS were factored out.  Unfortunately, the first half of the millennium was a dire decade for investments showing no growth in the first 10 years.   So, a reduction was inevitable.