Over 50's Life Cover Plan - Miss-sold?

Jsab

Hello,
I'm hoping someone can help me on the next steps to be taken?
My father is 84 and we have just been going through his finances.
He took out an "Over 50's Life Cover Plan" with Engage Mutual Assurance in 2006 and has been paying them £12 a month for £1700 death cover.
He has obviously paid a lot more into this policy than the £1700 max that he could ever get out.
On the original documents it never mentions you could pay more in than you receive, he didn't receive any correspondence at the "tipping point" when he would have paid in £1700, and he never received any correspondence when the company merged and became One Family in 2014 - we had to google to find the policy was now run by One Family.
I have spoken to One Family and they admitted they didn't have any reared of corresponding with my dad regarding the tipping point or the change in ownership but they have since sent my dad a letter saying that he can either keep up the £12 payments for stop paying and the cover will be terminated with no refund. The only option they are saying is sending this to the financial ombudsman.
Can any kind person please help us ?
Thanks You
JSAB

caprikid1

Surely they have done nothing wrong ? Not sure how this is missold.

He's had a long and fabulous life, unfortunately the insurance has not paid out yet.

That's the way insurance works, if everyone got a bigger pay out than they put in how would that work ?

Not sure you would have complained if he died 12 months after taking out the policy and have the full pay-out.

Brie

I believe the regulations on these policies have changed in recent years but a couple of decades back they were sold on the basis of "what if you die in the next few months?" or similar.  So playing on an individual's fears and lack of financial nouse so they don't realise that they very well might not get good value.  

My inlaws started similar plans in the 1980s both paying £4 a month to get £250 back.  They both had about 40 years of payments made so way exceeded the return value after the first 5 years.  The company did have some standards and had upped the payout to £750 by the time they (or actually we) collected the cash.  

What your dad has to decide is whether he wants to quit the policy and say goodbye to anything he's paid in and instead put £12 a month into a savings account or whether he wants to continue to pay.  He'd have to live another 12 years to be better off on the first option compared to carrying on.   

p00hsticks

As others have pointed out this is an life insurance policy, not some sort of savings product. Those that live a long time are effectively paying for those who die shortly after they take out the policy. 

Over the years I (and I expect you) will probably have paid out a lot of money for home and car insurance premiums and the like, possibly without getting anything back. That's just the way insurance works - it's mainly for peace of mind and to mitigate the possibility of an expensive bill if and when things go wrong. 

As the numerous day time TV adverts say, with life insurance you (or rather you family) are guaranteed to eventually get a pay out providing you keep paying the premiums. (what of course they don't say, at least in large print,  is that if, like your father, you are blessed with a long life, that sum may be considerably less than you have paid in over the years). 

dunstonh

Over 50's Life Cover Plan - Miss-sold?

Its hard to be missold an over 50s plan as the advice market typically doesn't go near them as they are usually poor value.     The vast majority of these plans are bought and not sold. e.g newspaper advert, tv advert etc.   

The only option they are saying is sending this to the financial ombudsman.

If they reject your complaint, they have to give the option to refer the complaint to the FOS.  As there appears to be no wrongdoing, it is hard to see what you are trying to achieve.

 These plans are typically aimed at those who think they are going to have a short life expectancy.    Those that die early are cross-subsidised by those that do not.    That is the nature of insurance.     These are not savings plans.