# unit linked life assurance



## seantheman (16 May 2009)

just want to run this past you guys to get some input please.
the following is for a uk product but the situation would be the same were it irish i'm sure. as a 24 yr in 1988 old took out a barclays maximum cover plan(unit linked) monthly payments back then were £44 for £100,000 of life cover, continued with this for 16 yrs until around my 40ith birthday a review decided that to maintain my current level of cover i would have to increase monthly payment. i declined and the level fell to £87,000, monthly premium still £44. just had another review and it says £44 will only give £72,000 cover. to maintain £87,000 i would have to increase premium to £65 pm.i rang barclays and they told me the surrender value would be £9,300. out of curiosity i asked, and he told me surrender values were £11,100 1.5 yrs ago and £11,500 2 yrs ago.
         now my kids are mid teens now, no mortgage,loans etc. would i be better at this stage of life, 45yr old , to buy 10 or 15 yr term assurance and cash in the uk policy. any advice appreciated


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## Carramore (16 May 2009)

Assuming that you don't have any health problems, you are probably best advised to lapse the policy.  It should be possible to buy the same level of life cover (assuming you need it of course) at a cheaper price - or alternatively get higher cover for the same price.


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## seantheman (18 May 2009)

thanks for your reply, think i'll start ringing around some of the life cover specialists in the morning to see what i would pay a month for €100,000(guess thats roughly the equivalent of £87,000) of term cover. any particularly good ones i should try or bad ones i should avoid. forgot to say in opening post that i live in ireland now.


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## StevieC (18 May 2009)

In general reviewable unit linked policies for life assurance are a bad idea in my opinion. Sure you get a guarantee that its whole of life but you leave yourself open to ransom at future reviews.

Provided you are in good health a guaranteed term plan is a good idea. If you really want a whole of life policy, both Eagle Star and Hibernian offer a  guaranteed whole of life plan that has no reviews. You will pay more for it initially but at least you know the premium will never rise.

Good luck shopping around.


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## seantheman (16 Jan 2014)

Hi guys,
Hope you're all still well.Fast forward almost five years and i'm glad i didn't cash out at the time.The policy has a value today of over £16k, that's an increase of over £6k in less than 5years.Anyway i looked again this week at possibility of cashing in policy.At this stage i've set up a 15yr term policy to replace this policy at a cost of €50pcm for €150k cover.
So i've got the surrender papers and they ask me to sign and return with the policy document,I have a look at the policy document for the first time since 1989 and in the schedule it says.
Premium ; £44.00 payable at monthly intervals from 31/05/89 throughout the lifetime of the life assured.
Does this mean that there shouldn't have been premium reviews and they should have stayed fixed at £44pcm?
Sean.


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## mercman (16 Jan 2014)

Sean, this a very interesting thread and post and should be made a KEY POST.

The point you have made is understandable. If it's not in the Terms & Conditions then I do not believe that the premiums can be adjusted for the same cover.

The only difference I see is that the old Policy if for whole of Life, where Term Insurance covers for the period of the Policy only. Basically I would see the whole of life Policy as something to leave your beneficiaries, after the adjustment matter is sorted.


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## Brendan Burgess (16 Jan 2014)

> Premium ; £44.00 payable at monthly intervals from 31/05/89 throughout the lifetime of the life assured.
> Does this mean that there shouldn't have been premium reviews and they should have stayed fixed at £44pcm?



These are standard policies

They contain a clause which allows them to review the amount of premium payable for life cover.  I would be fairly sure that this clause is in the terms and conditions.  If it's not, then they should only be charging £44. 

Coincidentally twofor1 complained to the FSO and won his case, because he had received a letter saying that the premiums would not increase and the Ombudsman held that this overrode the policy.

Successful case against Aviva on unit linked whole of life policy


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## Brendan Burgess (16 Jan 2014)

mercman said:


> Sean, this a very interesting thread and post and should be made a KEY POST.
> 
> .



Thanks mercman for the suggestion 

I have started a Key Post on the topic here

*Key Post* Insurance company increasing premium on unit-linked, whole of life policies 




Brendan


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## seantheman (16 Jan 2014)

mercman said:


> The only difference I see is that the old Policy if for whole of Life, where Term Insurance covers for the period of the Policy only. Basically I would see the whole of life Policy as something to leave your beneficiaries, after the adjustment matter is sorted.


 
Thanks for your input Mercman, but i think that there's a tipping point and i'm probably getting close to it at the moment. Firstly, there's a more valuable replacement policy in place should anything happen to me in the next 15yrs. Secondly I have two kids going to college in Dublin which has to be funded (no grants) so the surrender value looks good. Finally,if it turns out that the premiums are indeed reviewable i expect another review this year and 5yrs time and 10yrs time...... so what premium will i be paying by then for what cover?


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## Brendan Burgess (16 Jan 2014)

Hi Sean

Were you able to cancel the life insurance element of the policy and keep the savngs policy?  That is what I understood you actually did. 

It sounds as if you don't need life cover anymore. 

Brendan


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## seantheman (16 Jan 2014)

Haven't done anything yet Brendan. Spoke to one of their advisors today and she was a bit thrown when i read out what it said in the schedule, she said that a superior would contact me within 48hrs to discuss. It may be that i recieved documentation down thru the years that this policy was reviewable and if i did, i will have filed them but i'll hear what they have to say anyway. I never gave any consideration to splitting the life and savings aspects of the policy or even if it's doable. Maybe Marc or one of the contributors with English experience may be familiar with the policy and could advise.


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## seantheman (23 Jan 2014)

Ok,so they got back to me and the terms and conditions DO say that the policy was reviewable, anyhow while awaiting the outcome the units continued to creep up.
Time to cash out and keep the sprogs at college for another year.


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