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  • FIRST POST
    • reefs
    • By reefs 17th May 19, 8:55 AM
    • 6Posts
    • 1Thanks
    reefs
    Policies avoid just before death
    • #1
    • 17th May 19, 8:55 AM
    Policies avoid just before death 17th May 19 at 8:55 AM
    Iíve had a poor experience with Life policies, and Iíd be interested on your thoughts.

    My parents never had any money in their bank, but hey did manage to get by on what they earned, and paid in to life insurance policies.

    When my mother died unexpectedly a number of years back, the life insurance policy she had paid into for a number of years refused to pay out.

    My mother was divorced and living alone at the time.

    In the 3 months running up to her death, she was ill and spent much of the time in hospital.

    As she was Iíll, she wasnít working.
    As she wasnít working she didnít get paid
    As she didnít get paid, direct debits including life insurance bounced.
    As the payments bounced, the insurance company cancelled her policy.

    Needless to say, they now had reason to refuse payment, even though she paid in for a number of years.

    Surely this is a fairly common thing, people spend time in hospital prior to death. Do the Insurance companies get out of life insurance claims so easily, and perhaps regularly?

    I may have a similar situation with my father now. This feels really unfair to him, as he made these provisions, and to us as a family.

    What is supposed to happen, when you get older in life, and for whatever reason, you are unable to work, and struggle to pay premiums.
Page 1
    • Weighty1
    • By Weighty1 17th May 19, 9:20 AM
    • 499 Posts
    • 262 Thanks
    Weighty1
    • #2
    • 17th May 19, 9:20 AM
    • #2
    • 17th May 19, 9:20 AM
    Sorry to hear about your situation but this is standard for a life insurance provider or any other provider of any service ever. If you don't pay for the product you can't expect it to be there for you. The T&C's will confirm that premiums must be paid.

    Could you and your family not club together to pay the premiums to stop your fathers plan from lapsing?

    There is something which can be added onto a plan to prevent it from lapsing and it's called "waiver of premium", but this must be included at the outset of the policy. This benefits means if you are ill long term the insurer will maintain the cover free of charge until you either return to work, the policy ends or a claim made. If your father took advice from an adviser then they should have explained about this benefit and its worth. Did he arrange the cover himself or via a broker?

    That said, waiver of premium is not always available depending on the type of policy, the age of the applicant and the age at when ill-health strikes, so this not being included doesn't necessarily mean any wrongdoing occured.
    Last edited by Weighty1; 17-05-2019 at 10:29 AM.
    • dunstonh
    • By dunstonh 17th May 19, 11:08 AM
    • 98,274 Posts
    • 66,507 Thanks
    dunstonh
    • #3
    • 17th May 19, 11:08 AM
    • #3
    • 17th May 19, 11:08 AM
    When my mother died unexpectedly a number of years back, the life insurance policy she had paid into for a number of years refused to pay out.
    It is extremely rare for life assurance not to pay out on death. The only cases tend to be intentional non-disclosure of medical history.

    In the 3 months running up to her death, she was ill and spent much of the time in hospital.

    As she was I’ll, she wasn’t working.
    As she wasn’t working she didn’t get paid
    As she didn’t get paid, direct debits including life insurance bounced.
    As the payments bounced, the insurance company cancelled her policy.

    Needless to say, they now had reason to refuse payment, even though she paid in for a number of years.
    Effectively, each monthly payment gives you cover for the month ahead. So, if there is no payment for that month the cover will stop. Most providers will not terminate straight away. They will give 2 months grace to allow for payment issues.

    Some insurers have reversed rejections once being told that the period of non-payment was connected to the condition that caused death. Was this raised with the insurer?

    Surely this is a fairly common thing, people spend time in hospital prior to death. Do the Insurance companies get out of life insurance claims so easily, and perhaps regularly?
    Its not that common as the partner/spouse will usually take over their affairs or the children of the parent will give support. Where people do not have the support chains like that, it tends to be that they do not have life assurance.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • reefs
    • By reefs 20th May 19, 3:03 PM
    • 6 Posts
    • 1 Thanks
    reefs
    • #4
    • 20th May 19, 3:03 PM
    • #4
    • 20th May 19, 3:03 PM
    Thanks for the responses. We did take up the issue with the insurance company at the time. They took a hard stance.

    It would appear that my family circumstances show that life insurance in face value covered their death, but my families finances have made them a very poor investment.
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