Life Life Assurance, premium increase from €45.20 to €154.70 pm

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Noirin08

Guest
We took out a Laser Life Assurance policy with Hibernian Insurance (now Aviva) in May, 1986, Whole of Life, IR£40,000 first death, IR£30.00 premium per month.

The policy included a savings element and we withdrew £2,500 in September 1999, leaving a balance Life Assurance of £37,500. In Euro terms, this is €44,695 and premium of €45.20.

We've just been informed that the premium will be €154.70 pm (an increase of €109.50 pm, approx. 342%). They said the current premium is not enough to sustain the life assurance. They said they do reviews. I asked why they didn't realise it in the last review or the previous one, 8/10 years ago, when, if they had increased it to say €60 pm, we could afford it.

Any advice would be very welcome. Thank you.
 
Twenty six years ago you would have received your policy documents and in the terms and conditions this review would have been mentioned.

Since that time did you ever examine again your finances and the suitability of this policy?
 
No, I didn't. I thought, when we took out the policy, that it was what we needed.
 
I have also recently been advised of a 340% increase in premium by Aviva for my life cover, for much the same reasons. It would be interesting to hear if many others have similar increases.

My life cover is part of a private pension with Aviva that I stopped paying into several years ago. Aviva told me at the time that life cover remained in place and was paid for from my pension fund, however if I wished to protect my pension fund I could pay a reduced premium for life cover only. I wanted to keep my small pension fund so took this option and have been paying a’’ life cover only’’ premium which has increased by 5% every year to date.

Under the T&c’s Aviva is obliged to carry out regular reviews and can adjust the amount charged, either by increasing the premium and/or using funds from the pension fund. In my case these reviews were never carried out until this year, hence the increase.

In hindsight it was a mistake to have life cover as part of another product. It appears unlike standalone policy’s where payments and benefits can be fixed or they can be increased by modest amounts in line with inflation each year. However when part of another product the cost of life cover is not always apparent, in my case anyway based on my new premium the increase has been over 20% each year.

The premium now being asked for is wildly excessive, I have decided not to pay it, Instead I got life cover elsewhere and cancelled the life cover element of my pension policy with Aviva. All the main insurers including Aviva offered similar standalone cover far cheaper than what Aviva wanted me to pay through my pension policy.

I took life cover at a young age to avoid problems like this as I got older, luckily I have no major health issues and have been able to get reasonably affordable life cover elsewhere. However if I had any medical issues which many people do as they get older I might be unable to get life cover elsewhere and would also be unable to afford the wild premiums now sought by Aviva, so would be left without life cover just when I needed it most.
 
Thanks for your reply, twofor1.

Unfortunately, that's one of the problems we now have as I've been ill for quite a long time. The other problem is that policy is assigned to a mortgage, so I feel we're in quite a quandary.

The two options we have are to pay the increased premium of €154.70 or, Aviva said if we continue to pay €45.20, we will have cover of €12,333. The former isn't an option as we can't afford it. The latter doesn't give us enough cover for our mortgage.

I'm appalled at this situation and feel it quite unfair.

Like you, we took out this life cover when we were young to avoid problems like this and just don't know what to do at this stage.
 
Isn't there an option on that policy where you can convert a level of cover onto another more affordable and appropriate policy to cover your mortgage without you having to provide evidence of continued good health?
 
No Sumatra, there isn't. I asked if there was a conversion option and was told no.

In the letter they wrote: ".. we regret that we have lapsed your policy with effect from 11 December 2012". The guy I spoke with told me he'd lodge a complaint for me and email me details of reviews and also a Declaration of Health form in case I wished to continue the policy. I said under no circumstances would I fill out a Declaration of Health and that I shouldn't have to as my policy doesn't lapse until next month, which seemed to surprise him as he asked for the date of the letter and whose signature was on it. (He was probably surprised as that sentence was written strangely, i.e. past tense "we have lapsed")

I asked, seeing as I'm still under cover with them, would they do a term policy for me, without a DOH, he said no.

I wonder if there are others who are coming across this problem now with Laser Life Whole of Life policy with Hibernian Insurance (Aviva)? My husband and I are hardly the only ones, are we??
 
If your policy has already lapsed then it wouldn't be an option.

In their letter they could have said your policy lapsed 11/11/12 but not a future date 11/12/12. If your policy has already lapsed then their system wouldn't have just sent you out a letter offering a review.

Because you are ill you can't sign a DOH. Even if you are ill they may accept you back on cover but could charge you more based on your current health or they may decline offering you cover. If you missed a premium then you would have received at least two written reminders (by post assuming they have your correct correspondence address) before your policy would have lapsed so it wouldn't have lapsed out of the blue. Normally Aviva will keep vover in place for 30 days after your due date. After that your cover may end and they may need a satisfactory declaration of health before they can cover you again. My guess is the 11/12/12 is a typo and should have read 11/11/12.

Have you checked your bank statements as proof from your side that your monthly premiums have been paid up to date?
 
They were the words they used. When I told the insurance guy, he checked with somebody else, came back and asked me the date of the letter and whose signature was on it. So I was happy, since I have it in writing.

I've checked our bank account and the premium was taken out.

I still think that it's unfair that they can do this. We took out that policy in good faith. The amount of insurance we required, along with our details, and the premium was accepted.
 
I'd suggest you phone them first thing this morning to sort out this lapse issue. Keep a record of the number called, time / date of call, person you spoke to, what you complained about and what action and timeline they are taking to clarify or resolve the issue. Regarding the other issues you might also consider asking them to post you a copy of their complaints procedure and a full copy of your policy terms and conditions if you don't already have them on file.
 
Thank you Sumatra.
I just received a letter from Aviva saying that somebody from the company will be in touch with me in the next 20 (yes, twenty) days regarding my complaint.
 
Noirin08, I think if I were you I'd ask Aviva for a copy of their complaints procedure and follow it to a tee. Put your complaint to them in writing. Keep meticulous records.

Your dissatisfaction is far greater than the person on the phone in Aviva appears to have understood and therefore not all of your concerns may be addressed when they finally reply to you.
 
Noirin08 said:
I just received a letter from Aviva saying that somebody from the company will be in touch with me in the next 20 (yes, twenty) days regarding my complaint.
Click to expand...

Just in relation to this point, this is the time frame specified in section 10.9 (c) of the Central Bank of Ireland's Consumer Protection Code 2012
 
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