Life Can't afford increase in monthly payment

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redwood park

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Hi.My husband and I took out insurance (Grolife Plan) about thirty years ago with Irish Life. It is a joint policy where money (E118,275) is paid on 1st death. The monthly payment was index linked started out at around £40 a month and is now E116.95. We never missed a payment. Yesterday we got a letter to say that monthly payment is increasing to E291.80 if we wish to have same benefit. If we leave payment as it is benefit is reduced to E46,936.81 but we will be in danger of policy being cancelled. They have said "As you get older the cost of providing these benefits increases. When the cost to maintain the benefits reaches a stage where it is greater than the regular payments the difference is made up from the value of the fund. The terms and conditions of your plan state that we will cancel your plan if value becomes negative". We are in shock as my husband is 66. I am 64. It is such a huge increase E174.85 Any advice would be appreciated.Thanks.
 
I dont have any advice sorry, but I would like to say that is disgraceful. I have some history with these shower of W........s ! when my own Mother passed away not so long ago, they made the whole thing impossible for us and dragged her payments out beyond belief.. I wont go into it, its not my thread but they treated us terrible, although she had everything done with solicitor as she knew she was dying, it made no diff.. they just wanted to hold money in their account for as long as they could.. then had the cheek to send a letter to my deceased mother saying her policy was due for renewal.......... I will never give them a cent. I hope someone helps you x
 
Unfortunately you seemed to have signed up to a reviewable whole of life policy,these policies have been miss sold to such a degree that IMO they should be discontinued.They're are alternative possibilities,try and get some independent advice.


Www.powerinsurances.ie
 
I found a [broken link removed] which may give some hope in this atrocious situation. It's on page 16, entitled "€3,000 insurance fund increase for reviews not carried out - possible 96,000 other cases".

Here's a summary/cut & paste of sections:

Complainant purchased unit-linked, whole of life insurance policy in 1983, life cover approx. €240,000, yearly premium €900. Policy included ‘policy review’ provision which provided for the review of the premium and benefit payable under the policy at stated intervals.

Review carried out on 10th anniversary of the policy, Company advised there was no need to change premium payable in order to maintain benefits under the policy. However, in 2008 the Company wrote to Complainant advising that the premium payable was no longer sufficient to maintain the level of cover under the policy. The Company advised the Complainant that she could continue to pay annual premium of €900 for life cover of €85,000 or maintain life cover of €240,000 for an increased annual premium of €4,900.

Ombudsman looked at the policy documentation and ... concluded that the Company was entitled to carry out policy reviews. However, the Ombudsman noted that while the Company carried out a review on the 10th anniversary, it failed to carry out reviews in 1998 and 2003. The Ombudsman found that reviews should have been carried out at these times and by not doing so, the Complainant did not have the opportunity to consider her life cover options at an earlier date than 2008.

The Ombudsman directed the Company to increase the value of the Complainant’s fund by €3,000 and to carry out a review based on this increased value.

The Ombudsman had serious concerns that this failure may have occurred in other instances and he informed the Company and the Financial Regulator in March 2009 that he would expect similar policies be reviewed to ensure that this was not the case.
Due to a High Court judgment he could not direct the Company to do so and he was accordingly pleased to note the May 2009 Company’s response. It indicated that to identify if each policy had all relevant reviews carried out would involve manually checking 96,000 policies which would be an inordinate amount of work. Instead it proposed to carry out a sample review in the region of 160 policies and the results of same would be furnished to the Ombudsman.
While the Ombudsman was satisfied with this approach he requested that the random sample be increased to 300 and he awaits its outcome.

Hopefully this will help in some way. I don't actually know what you should do next, perhaps others can advise, but I think it would be no harm to phone the Financial Ombudsmans office (Lo Call: 1890 88 20 90) in light of the above case. Good luck.
 
Hi. Many thanks for your replies. Most companies won't even quote for life ins at our age (which I fully understand). Powerinsurance only quote for those born after 1950. Irish Life know this so they can up payments to whatever they like. We thought when policy was index linked we were OK. As the saying goes "they give an umbrella when its sunny and take it back when it rains". We will contact the Ombudsman but Im sure it is in their Terms and Conditions. I will let you know the outcome but it will probably take forever to get a response. We have been given our next review date which is in 2015. God only knows what the increase will be then. Looks like it will be reviewed every 5 years. Even if we manage to pay this increase are we throwing good money after bad as we definitely wont be able to pay future increases. Husband put all his pension lump sum in shares which are now worth very little. (Sin sceil eile). Who said people are foolish to put money under mattress. Wish we did. Any other advice much appreciated. Thanks again
 
Do you really need life insurance? Unless you have signficant dependants (e.g. an adult with a disability who is unable to care for themselves), why not just drop the life insurance?
 
Hi Jimbobp, I clicked on your link and then on life insurance but when asked to insert date of birth on application form (drop down options) only starts at 1950. We hate to walk away from other policy after all the money spent. Rang Ombudsman but they only take complaints in writing. They told us to ring Ins Federation which we did. Person who could deal with us out of office. Was to ring back but didnt. Thank you very much for taking the time.
 
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