Increased Life Cover Premium

My husband and I took out a whole of life assurance policy providing dual life cover with Irish Life in 1993. We have availed of the consumer index increases each year so our premiums have increase and the level of cover also increased accordingly.

However, the renewal notice for this year states that the cost of our life cover increases as we get older and if we want to maintain our current level of cover we must increase our premium by 100% (almost €800 per annum) or else continue paying the current premium but be only eligible for a life cover which is €50k lower that the current cover. They are asking us to sign a consent form to agree to this.

Apparently, our policy has a 10 yr review option, which we were not aware of. We are now 15 years into the policy and If it was reviewed 5 years ago, we were not aware of this and we were not told then that our premium was inadequate to meet our needs. We are very concerned - if we agree to the increase we have no guarantee that in five years time they will review us again and do the same thing.

Any comments or advice would be greatly appreciated. We are aged 54 and 47 and in good health. Would we get a better deal elsewhere? 100% increased premium seems appallingly high.

You should definitely try somewhere else, see what they come up with, it can do no harm. If as you say you are in good health, then no loading will apply to your quote so it may come in lower.
Just dont reply to the renewal notice until you get acceptance from another company. Eagle Star will probably give you the best rate out there. If you went through a broker for your Irish Life policy I am sure he/she will do their utmost to get you a better deal as it means commission for them, and thats very welcome in these lean times.

At this stage I would shop around for a term policy which matches your exact cover requirements i.e. amount of cover and ceasing age - assuming you are in good health etc.

This is the most transparent way of buying cover and will avoid any nast surprises.

Consider getting a 'Conversion Option' which allows you to continue cover after your chosen ceasing age without medical evidence - albeit under the terms that will be prevailing at the time.

Its not unusual for whole of life policies to be reviewed.

Its difficult to calculate a premium over a 'lifetime' e.g. if a 70/80/90 year period was used for the initial calculation, the premiums would be huge. Therefore, the premium for a whole of life policy is usually calculated for a set no. of years e.g. 25.

At the beginning the premium may be higher than the actual cost of the life assurance. The difference (premium - life cover costs) accumulate so in later years when the cost of the life cover increases, the premiums don't necessarily increase straight away as it eats into the earlier overpayments.

The policy is reviewed at set intervals and if there are enough funds available, the premium won't increase. Unfortunately when the funds run out and the life cover costs increase (due to age and increased risk) the premiums increase.

It is difficult for anyone to recommend a policy as it depends on your personal circumstances. Shop around but don't cancel your current life cover plan until another policy is in place.

PM1234 said:

Its not unusual for whole of life policies to be reviewed.

Its difficult to calculate a premium over a 'lifetime' e.g. if a 70/80/90 year period was used for the initial calculation, the premiums would be huge. Therefore, the premium for a whole of life policy is usually calculated for a set no. of years e.g. 25.

At the beginning the premium may be higher than the actual cost of the life assurance. The difference (premium - life cover costs) accumulate so in later years when the cost of the life cover increases, the premiums don't necessarily increase straight away as it eats into the earlier overpayments.

The policy is reviewed at set intervals and if there are enough funds available, the premium won't increase. Unfortunately when the funds run out and the life cover costs increase (due to age and increased risk) the premiums increase.

It is difficult for anyone to recommend a policy as it depends on your personal circumstances. Shop around but don't cancel your current life cover plan until another policy is in place.

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I agree, you need to get an independent adviser to review your life needs. This type of product could be come very expensive in the long run (if the policy is reviewed three times over the next 15 years, you could end up paying three times the monthly premium you are currently paying). Whoever you go to, ask them to check out Eagle stars/Zurich's guaranteed whole of life policy. This policy has guaranteed premiums/benefit for life, and won't be subject to review. It may cost more in the short term but may be far more beneficial over your lifetime.


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Thank you all for your helpful comments and advice. I'm definately going to shop around. So far Eagle Star/Zurich sounds like a good bet.

Thanks again.

Stemel.