Query re. Life Assurance

[Unichick]

Hi All

Forgive me if this question has been asked before, I've done a search and there doesn't seem to be anything on it. I received a letter from my life assurance provider yesterday stating that our policy will increase by 6euro p/m as it is index linked it has to cover inflation. Forgive my ignorance but are we not currently experiencing a recession?? i phoned the service number but the customer service agent didn't seem to have any further knowledge to answer my query and suggested that I contact my broker. Any answers on this gratefully accepted

 

[PM1234]

They may be averaging the increases over a specific term. If you do not want it, write to the provider and instruct them to remove the indexation from your policy.

 

[Leprechaun]

This may be a term assurance index linked policy?? ...if so...The premiums go up each year along with the sum assured. This is generally a prudent thing to do to maintain the 'real' value of any benefit payed out. I do agree that we are not in an inflationary period at the moment, but these policies are generally taken out over a longer period, where inflation will inevitably occur. You can generally write to your life assurance company and request that the indexation be removed. Some companies may allow you to re-instate this option the following year, but if it is turned down for a second time the plan will continue with level cover.