ReAssure Death Policy

RobFrost4114

Hi guys. My first MSE post and I'm after some help/advice please.
My 80 year old father has been paying into a payment on death policy for 23 years. The policy is with ReAssure (Telford) who are part of the Phoenix Group. He has been paying in £50 per month for 23 years and has a settlement figure of £4700 upon his passing. This means he has paid £13,500 so far and is continuing to pay £50 per month. The final figure went down last year from £5250 to £4700. Clearly this is not a policy with the customer and value in mind!
Do we have any options or a case for mis-selling? It doesn't seem very fair and it really feels like a policy or system that shouldn't be allowed.
Any advice would be most welcome (and yes we probably should have looked at this some time previously in the 23 years! 😊).
Thanks.

Keep_pedalling

No you don’t, it’s insurance if you are unlucky and die young it pays out more than you put in, if like your father you have the good fortune to live a longer life you pay in more than you beneficiaries get back.

No different to spending thousands on car or home insurance and never making a claim. 

Marcon

RobFrost4114 said:

Hi guys. My first MSE post and I'm after some help/advice please.
My 80 year old father has been paying into a payment on death policy for 23 years. The policy is with ReAssure (Telford) who are part of the Phoenix Group. He has been paying in £50 per month for 23 years and has a settlement figure of £4700 upon his passing. This means he has paid £13,500 so far and is continuing to pay £50 per month. The final figure went down last year from £5250 to £4700. Clearly this is not a policy with the customer and value in mind!
Do we have any options or a case for mis-selling? It doesn't seem very fair and it really feels like a policy or system that shouldn't be allowed.
Any advice would be most welcome (and yes we probably should have looked at this some time previously in the 23 years! 😊).
Thanks.

There are various types of life policy. Decreasing term life cover is one of them - good explanation here: https://www.postoffice.co.uk/life-cover/life-insurance/term/decreasing

If he bought the 'wrong one' for his needs, then that's down to him - unless he was advised by a regulated adviser and given 'wrong' advice based on the information he gave to the adviser?

dunstonh

Clearly this is not a policy with the customer and value in mind!

How do you work that out?

If he had died earlier, it would have been much better value.  However, which would you prefer.  More money or more life?

Do we have any options or a case for mis-selling? It doesn't seem very fair and it really feels like a policy or system that shouldn't be allowed.

How is it a missale?

Dear Phoenix,   my father has lived longer than expected and I am not happy about that as it has cost more money than if he had died earlier.  As my father didn't predict his date of death very well and nor did your agent, I think it should be refunded......

I have paid home insurance for 30 years and never made a claim.   I hope I never will.    My life assurance is £100pm and I hope that it never has to pay out.

Veteransaver

I believe that certain ReAssure type policies aren't allowed to be sold now. Not sure if that is one of them but I doubt it would be misselling, I presume an IFA recommended it to your father

Does the policy have any redemption value? 
What was the purpose of taking it out? Was it to pay off a mortgage (hence why it was reducing cover each year).
Normal reasons for them would be to cover an IHT bill or cover funeral costs, for which you wouldn't want reducing cover each year.

DullGreyGuy

Veteransaver said:

I believe that certain ReAssure type policies aren't allowed to be sold now. Not sure if that is one of them but I doubt it would be misselling, I presume an IFA recommended it to your father

Does the policy have any redemption value? 
What was the purpose of taking it out? Was it to pay off a mortgage (hence why it was reducing cover each year).
Normal reasons for them would be to cover an IHT bill or cover funeral costs, for which you wouldn't want reducing cover each year.

It's most likely whole of life policy, unlike a term policy the premiums are typically reviewable after the first 10 years and every 5 years there after.  Others will know when the switched happen but traditionally they were half insurance half investment with the idea the investment is used to buffer later year potential premium increases and gives it a surrender value.

If the portfolio isn't performing inline with expectations at a review you are given the option of increasing the premiums or reducing the sum insured. 

dunstonh

I believe that certain ReAssure type policies aren't allowed to be sold now.

Whilst a technically correct statement, it is the wrong conclusion in relation to this thread.
For example, a  S226 RAC couldn't be sold after April 1988.  However, that applied to everyone as legislation changed.   

Legislation, taxation, and product offerings change all the time, and providers regularly need to adapt and revise.

Not sure if that is one of them but I doubt it would be misselling, I presume an IFA recommended it to your father

This type of policy is still available to buy.  Not from ReAssure as they are a closed company but it is available with others.  It may have been an IFA but was probably more likely to be an insurance agent or FA as the old home service salesforces used to do a lot of these.    We would have a better idea if the legacy company was known (e.g. was it L&G, HSBC, Barclays Life, Alico, NM, Guardian etc).    

Pre 1995 (approx) these types of plan were very commonplace.    Post 95, term assurance or non-investment-backed whole-of-life assurance became more common.

RobFrost4114

Thanks for your feedback guys, useful to get a better understanding of something that isn't really my area!
I'm happy to close the thread now.
Some of you seemed to decide it was a discussion about my relationship with my father and whether spending more time with him or having more money was the question. A little unfair and condescending but hey, welcome to the world of internet forums I guess. 
Stay safe, live long and never have to make a payment on death claim.