Life assurance Investment query

Hi My wife took out what she assumed to be a 20 year with profits plan It now transpires that the product was in fact a Unit linked Whole of life plan, which has a review every 5 years. I have 2 questions:
1. Can this policy be encashed at review?-next 5 yr review date is June '11
2. The policy was sold to her at the age of 21 by a broker who described as a savings plan,rather than an assurance policy-was she mis-sold this policy?

thanks in advance,

daithi

Which company sold this to her ??? Looks lige Policy has been mis sold but before we all go spouting off about this that and the other, did she re ceive anything in writing ?

How long is the policy live. Is it a few months or a number of months ? There is huge talk in Galway regarding sales people selling policies and how they have conned many people, including me.

missold??? policy

Hi Mercman, the policy was sold 20 years ago-initially all the paperwork referred to a managed fund,at some point the product started to be called a unit linked whole of life plan-it was initially sold as an investment/savings product ,rather than an assurance policy, and herself was under the impression that the product would mature in june ,11 but has just received a letter stating the next review date to be june '16.
There is a figure referred to as "Sum Assured"- am i right in thinking that this sum would only be payable upon death? Apologies for lack of clue on this.

daithi

ps I will pm you with further details.

daithi

These policies were very common in the past, such as the Irish Life Lifesaver Plan. Usually they are a regular monthly savings plan with life assurance attached. For example, you save €500 a month into the policy, and €50 is used as a life assurance premium with the remaining €450 invested in a managed or with profit fund . As it is a reviewable Whole of Life plan, the €50 life assurance portion is reviewed regularly and always goes up! After a long period in the policy, the life assurance premium could be more than the monthly premium (ie more than the €500 per month) so the capital lump sum value starts to reduce as they collect the shortfall.

I always recommend separating life assurance and savings, which is a much more common practice now. In many cases it is worth taking the 'encashment value' and investing in a better value stand alone investment, and then taking out a separate life assurance policy.

This would require some alanysis though to ensure it makes financial sense in your case, as there could be encashment penalties, and a new life assurance application with all the health questions etc can cause issues in some cases.

Daithi. If your wife contacts the insurer and asks them for copies of all the communications they posted to her over the past 20 years she'll probably find it difficult to argue that she thought it was a with profits plan etc.