Sun Life over 50s taken out by person with Dementia and in a home now.

Rottenapple

The past year has been a nightmare trying to get my mother (91) in a home as she has dementia.
Having gone through her paperwork I have found a Sun Life insurance policy she took out through a Sun newspaper advert which covers her for £3600. 
Checking what she has paid so far it equates to over £9000 and we still have to pay £36 a month until she dies.
How on earth do these insurance companies get away with this legal robbery.
Had not one of my younger sisters taken over the payments these would have stopped as my Mothers dementia made her completely forget.
Is there any recourse with Sun Life to stop these payments as she has clearly paid out far more than she will receive.
Thank you

dunstonh

How on earth do these insurance companies get away with this legal robbery.

How is it robbery?
These plans are mostly taken out by people who expect to be dead in the short term.    So a good proportion gets paid out more than is paid in.   Those who live for a long period end up paying more than they paid in, and they cross-subsidise those who die early.

Your mum has had hers over 20 years.   So, financially, its bad luck she is still alive.

 Is there any recourse with Sun Life to stop these payments as she has clearly paid out far more than she will receive.

There is no indication of any wrong doing or something being amiss.

BoGoF

The vast majority of people pay more into insurances (car, home, contents) than they will ever get back, is that robbery to? Admitedly car insurance is a legal requirement but many insurances are voluntary.

Brie

Had similar with my inlaws who started paying £4 a month in the 80s to get £250 back.  They both lived until relatively recently so paid way over the odds.  But they were both mentally fit at the time so presumably knew what they were doing.

If you are saying that your mom already had dementia when she signed up then there would be a cause to complain for the company taking advantage of someone who was vulnerable.  

Aretnap

I have paid far more in home insurance fees than I have been paid in claims and I very much hope that this will continue to be the case for the rest of my life. The way to get more out than you pay in is too have your house burn down, and I very much don't want that to happen.

Similarly the way to get more out of life insurance than you pay in is to die young. Your mum has lived into her 90s. Most people would regard living to a ripe old age as a good thing - but it does mean that the life insurance premiums she has paid have been "wasted", in the same way that my home insurance premiums have been.

As it happens, "over 50s" life insurance policies tend to be poor value for money. They ask no questions about your health or medical history, so the premiums reflect the fact that a lot of people who take them out will be in poor health and will have limited life expectancy. As such they are really a last resort for people whose health conditions mean that they can't get a conventional life insurance policy. Someone who is in good health for their age would usually be better off with a normal life insurance policy which asks medical questions when you take it out - if they need life insurance at all.

However there is a difference between "not great value for money as insurance goes" and "daylight robbery which demands compensation". Nothing you've said puts it in the latter category I'm afraid.

The choice at this point is whether to cancel the policy and write it the money that has already been paid, or whether to keep up the payments. Sorry to sound morbid, but this basically means comparing the monthly payments with how long you expect your mum to live now. Though with some policies the payments do stop once the customer reaches a certain age and the policy then pays out when they die, so double check whether this applies at any point.

SiliconChip

The other thing to consider is what sort of funeral your mum wants. She could have a direct cremation that could cost as little as £1000, in which case under 30 months of saving up the premiums will cover the cost, or she could want a bells and whistles funeral costing many thousands of pounds, in which case the Sun Life payout is only going to cover a fraction of the cost so may not be worth continuing anyway.

Keep_pedalling

SiliconChip said:

The other thing to consider is what sort of funeral your mum wants. She could have a direct cremation that could cost as little as £1000, in which case under 30 months of saving up the premiums will cover the cost, or she could want a bells and whistles funeral costing many thousands of pounds, in which case the Sun Life payout is only going to cover a fraction of the cost so may not be worth continuing anyway.

The life expectancy of a 91 your old with dementia is not great, so cancelling the policy is not going to be the best financial option in the long run, but if £36 a month can improve her quality of life then it may still be the best option for her.