Selling a Whole of Life insurance policy?

Voxbox

Hi All,

I'm needing advice on what to do with an expensive Whole of Life policy.

We have been paying into this WoL policy with Phoenix Life for about 40 years. The monthly premium has just gone up to £165 from £134 per month. The amount payable on first death is £71k.

We actually dont need this any more as we have both just retired and the kids have left home.

It seems a horrendous amount to be paying. We could cash it in but when I looked into this a few years ago, the amount offered was only a few £k.

What are my options?

Thanks in anticipation folks.

Cheers, VB

DullGreyGuy

Premiums are clearly reviewable and so will continue to escalate as you get older. 

If you no longer need it then cashing it in is probably your best bet

Voxbox

Thanks sir. Selling isnt an option at all?

dunstonh

Selling isnt an option at all?

The surrender value is the value of the units minus any surrender charge.
If someone wanted the investments you have they would just buy the units at the market price.   They do not need to pay you more for them

Many years ago, endowments had a small third party market because of the high cost of surrender that could exist with some and the fact there was a maturity date.   WOL plans don't have the maturity date.  

Voxbox

Thanks dunstonh
Sounds like cashing it in is the only option. 

DullGreyGuy

Voxbox said:

Thanks dunstonh
Sounds like cashing it in is the only option. 

In the US there is a market for selling policies but thats more driven by the fact that premiums are generally fixed and therefore its a relatively simple longevity calculation to say how much of the benefit will be eaten by the remaining premiums

In the UK they are more commonly reviewable and so you're premiums are £165 now but in 15 years time could be £200 or £500 depending on a wide range of factors and its just too much of a gamble for there to be a market

Voxbox

Thanks DGG. Wish we hadn't taken it out now! (and kept on top of it...)

DullGreyGuy

Voxbox said:

Thanks DGG. Wish we hadn't taken it out now! (and kept on top of it...)

40 years ago long term insurance products were very different and these sorts of things were often sold as a combination of insurance/assurance and investment. These days its a case of buy your insurance and investments separably and those in their 20/30s would be buying term insurance in most cases rather than whole of life assurance exactly because the need tends to end around retirement age 

kingstreet

The cynic in me suggests flexible unit-linked whole life contracts were designed more for salesforce commission reasons than anything else. I suspect most were set up on maximum cover basis with unsustainable premiums past the first review.

Voxbox

Kingstreet, 
Sadly, you are probably correct, given our other experience (of a pension) with the IFA that sold us it.
cheers, VB