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.

Bess321

BEWARE OF Asda OVER 50'S INSURANCE SCAM.
My elderly father has been paying £26.00 per month since 2009 on an Asda money over 50s Life Insurance policy. LV insurance somehow deal with existing customers . I called them to change his address and check the amount payable on death. They told me the amount would be £2044. He has paid in over £5000. (16 years) and still paying. This is for funeral costs. You cannot cash this in and if you stop paying he gets nothing. I am in the process of taking this to the media and financial ombudsman. Anyone else in the same position then I welcome any advice. He may as well have used loan sharks. They are profiting from vulnerable, elderly people. Scandalous!

CliveOfIndia

https://forums.moneysavingexpert.com/discussion/comment/81998321#Comment_81998321

Firstly, I'm not sure why you've seen fit to resurrect a thread that's well over 2 years old.

Secondly, the answer to your question is exactly the same as the answers that have been given to the OP - a life insurance policy has no cash-in value. If you die shortly after taking out the policy, you're (well, your family is) quids in. If you live for a long time then you lose out overall in terms of purely monetary value.

This is how all life insurance policies work, and this has always been the case. You have no basis for complaint.

dunstonh

CARE: 2024 thread revival on an unrelated matter.

 I am in the process of taking this to the media and financial ombudsman. 

on what basis? He chose to buy it knowing the terms. It wasn't sold to him.

 Anyone else in the same position then I welcome any advice. 

plenty of people.

He may as well have used loan sharks. They are profiting from vulnerable, elderly people. Scandalous!

There is no scandal. They are not profiting from the vulnerable.

Over-50s plans are an option of last resort. Typically taken out by people with short life expectancy. So, they are priced on that basis.

Your father was lucky and lived longer than he expected. So, you should be grateful that he lived longer than he expected. If his health was good when he bought the policy, then perhaps he should have taken more care making that purchase, but consumers are allowed to make mistakes.

Bess321

This is my elderly father's policy. I certainly would not entertain such an awful trap. There must have been thousands of people walked right into this.

For your info.

Yes, consumers have successfully won claims and received premium refunds for Asda Over 50s Life Insurance policies originating from that timeframe. [1, 2]

While a standard "missed payment" usually results in policy cancellation without a payout under strict terms and conditions, the specific Asda Over 50s Life Cover launched in September 2009 (underwritten by Liverpool Victoria / LV=) became the subject of heavy regulatory scrutiny and successful mis-selling claims. [1, 2, 3, 4]

Why Claims Have Been Won

• Misleading Advertising: In November 2010, the Advertising Standards Authority (ASA) formally upheld complaints against Asda Financial Services. They ruled that Asda's marketing for the Over 50s cover was misleading because it implied consumers would never pay more into the policy than the final payout, which was false unless they actively chose an expensive "capped premium" modification.

• Ombudsman Decisions: The Financial Ombudsman Service (FOS) has historically upheld complaints against LV= for mis-selling these plans. In documented cases, LV= was forced to acknowledge they misled customers.

Bess321

Yes, consumers have successfully won claims and received premium refunds for Asda Over 50s Life Insurance policies originating from that timeframe. [1, 2]

While a standard "missed payment" usually results in policy cancellation without a payout under strict terms and conditions, the specific Asda Over 50s Life Cover launched in September 2009 (underwritten by Liverpool Victoria / LV=) became the subject of heavy regulatory scrutiny and successful mis-selling claims. [1, 2, 3, 4]

Why Claims Have Been Won

• Misleading Advertising: In November 2010, the Advertising Standards Authority (ASA) formally upheld complaints against Asda Financial Services. They ruled that Asda's marketing for the Over 50s cover was misleading because it implied consumers would never pay more into the policy than the final payout, which was false unless they actively chose an expensive "capped premium" modification.

• Ombudsman Decisions: The Financial Ombudsman Service (FOS) has historically upheld complaints against LV= for mis-selling these plans. In documented cases, LV= was forced to acknowledge they misled customers.

Nasqueron

Do better pasting actual links to decisions not google's AI summary