Joe Duffy Show on Whole of Life/Investment policies

Joe was in fine form today. Possibly the fruitiest was his shock at hearing from the person whose term assurance ended at age 65. A scandalised Joe observed that after 65 was when you really needed life assurance. He opined that life assurance at younger ages (when you had little chance of collecting) was nothing short of "gambling against yourself". When Joe asked how much they got back when the policy terminated and was told zilch he became apoplectic. He questioned how could (such gougers) need a taxpayer bail-out.

Just for clarification to those who might have accepted some of this, a term assurance to age 65 in the majority of situations would be an exemplar of good advice. And of course Irish Life did not receive a taxpayer bail-out.

This was by a long way the worst performance I have heard from Joe. His total ignorance combined with his gratuitous accusatory language seems to me should be legally actionable.

I know, it was painful to listen to. I never understand how people view life insurance so differently from house or car insurance, I have paid a fortune in both over the years as has everyone and do we get anything back, of course not! You don't take out house insurance and hope to claim, same with car but even more so with life insurance isn't it the best scenario if you never have to claim.

That said the whole of life policies are a bit of a cod, do any of them every remain affordable to the end?

Monbretia said:

I know, it was painful to listen to. I never understand how people view life insurance so differently from house or car insurance, I have paid a fortune in both over the years as has everyone and do we get anything back, of course not! You don't take out house insurance and hope to claim, same with car but even more so with life insurance isn't it the best scenario if you never have to claim.

That said the whole of life policies are a bit of a cod, do any of them every remain affordable to the end?

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Agree absolutely. Those WoL policies were something of a folly for which I'm afraid the actuarial community need to do some answering. Joe started off ok, if slightly OTT, in highlighting the case of a policy review almost quintupling the premium. I also think the lady who had her sum assured and premiums index linked was badly treated by a policy review. Whatever about level WoL policies index linked policies never had a hope of being sustainable.

But it was the outrageous way in which Joe was scandalised by such things as people getting less than their premiums back from their life assurance and young people "gambling against themselves" and Irish Life being bailed out by the taxpayer which demonstrated at best a complete and wilful ignorance on his part. The broker guy had a slight point about mixing savings and protection but let himself down by playing along with Joe's populist rant eg against the "gobbledy-gook" T&C.

Duke

Why don't you ring in tomorrow and tell him that you have been paying your car insurance for 10 years with AXA and have never made a claim and now you are 65, they won't give you any of your money back?

Brendan

Boss I know people who worked in the industry and there was one key rubric, you do not talk to Joe.

Yes,I must agree that Joe was off the wall today,maybe he was playing to the gallery.

Its not the first subject that Joe would have pontificated on which he doesn't fully understand.

I hate listening to Joe when he loads his show with callers to suit his agenda and argument. As soon as anyone would come on to argue against it and point out the error of their logic, they are usually let go asap.

It really is time that people in this country started to take some responsibility for their actions when it comes to money and financial matters. Stop signing for things if you don't understand the consequences.

Joe Duffy was appalling. He hadn't a clue what he was talking about, this is par for the course though. He is unable to follow any flow of conversation and constantly repeats over and over his opening line when he encounters someone who knows what they are talking about. He never asks an intelligent question.
He never advised the callers that they were insured for a sum of money from the day they took out their policy. Although you would think that these people would know this themselves!
It is well known that he reads the comments on Boards when his show is live and learns from it as he goes. Unfortunately for him Boards is off the air at the moment so he is left to flounder on his own.

postman pat said:

Yes,I must agree that Joe was off the wall today,maybe he was playing to the gallery.

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He loves spinning. He's a total master at it. That's what makes him so good at his job. One may not like him but his show does get an audience and he does though tackle some institutions that deserve to be tackled.

IsleOfMan said:

Joe Duffy was appalling. He hadn't a clue what he was talking about, this is par for the course though. He is unable to follow any flow of conversation and constantly repeats over and over his opening line when he encounters someone who knows what they are talking about. He never asks an intelligent question.
He never advised the callers that they were insured for a sum of money from the day they took out their policy. Although you would think that these people would know this themselves!
It is well known that he reads the comments on Boards when his show is live and learns from it as he goes. Unfortunately for him Boards is off the air at the moment so he is left to flounder on his own.

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Maybe he should try Askaboutmoney!!

I'm not talking about the life loan issue here.
The life insurance/assurance policy thing on Liveline also related to combined insurance/assurance and savings/investment policies that were sold.
Many (especially working class) couples bought these in the 70s/80s and paid in for years.
My own parents included. I'm sure that many of us remember the "insurance man" calling to collect premiums every week/month?
In some (many?) they were led to believe that they stood to receive a lump sum at maturity.
In many (most?) cases this lump sum was negligible or never materialised.
I have a strong suspicion that there was a significant element of hard sell and maybe mis-selling here - especially to people ill versed in the intricacies of financial products in an era of much less customer protection/awareness than now. But it's probably difficult to ascertain that for certain at this remove?
Yes, WE all know that insurance/assurance premiums are "gone" once spent but these products (deliberately?) obfuscated matters.
Notwithstanding the shock horror coverage typical of Liveline I think it's unfair to dismiss all of the people complaining about this issue/these products as hard necked chancers as some people seem to be doing here.

Brendan Burgess said:

Duke

Why don't you ring in tomorrow and tell him that you have been paying your car insurance for 10 years with AXA and have never made a claim and now you are 65, they won't give you any of your money back?

Brendan

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Somebody did exactly that yesterday - pointed out that we all pay home, car, health insurance and get nothing "back" if we don't get to make a claim.
He wasn't complaining - he was just stating this as fact and as something reasonable (i.e. you pay for the service).
He did also sympathise with some of the other callers who felt that they had been hard done by on the "savings/investment" part of their life insurance/assurance policy.
To be honest the whole programme was all over the place in terms of not clarifying what people were talking about but my point above stands that these combined life insurance/assurance and savings/investments policies were at best confusing and at worst a bit of a swizz and possibly mis-sold.
For example a few people mentioned the projections of maturity values originally presented to them. Again WE all know that these are simply projections but at least some of the people assumed that these were guaranteed amounts - and I suspect that the seller didn't try to disabuse them of this misconception...

Endowment mortgage.

Just listening to the show again, and its so clear that the majority of the public do not understand different financial products.
Callers are coming on and making incorrect statements and not being challenged on them. Many do not seem to understand the simple concept of what an insurance policy is for example.

Maybe it should be something we should teach young people at school now.

Thanks Terry I fixed it.

Bronte said:

Thanks Terry I fixed it.

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It may not be a good idea to cancel a term policy once the mortgage is paid off. Again confusion here as some people dont realise that the term policy is aseperate issue and is a requirement by law for a mortgage in most circumstances. Why does joe duffy not get an informed person to simply explain issues like this when they are raised. I thought it was ironic when he took the final ad break in this section there was a long ad for Irish Life.

They should totally be taught at school, together with tax, budgeting and basic cooking but none of it appears to happen.

The late Colm Rapple always said don't mix life assurance and savings in the one product, he was right.

trojan said:

Why does joe duffy not get an informed person to simply explain issues like this when they are raised.

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Another dreadful show. It was like one idiot talking to another idiot. Joe Duffy called in John Lowe to help out.
He allowed a woman to come on the show who said that a €20k life loan was now €180k after 10 years at 6.5% compound.

The saga continued today. This time we get an example of a Life Loan of €20K which rolled up to €185K in 10 years. That's 25% per annum. Now that is exorbitant or just maybe we are not getting all the facts.

Endowment Mortgages were ill conceived, ask Eddie. Ironically, though, in general Endowment Mortgages have "outperformed" Annuity Mortgages as the former fully enjoyed the fall in interest rates whereas the latter by definition became less and less exposed to the fall in interest rate. The sting is that most EM buyers did not enjoy the much promised "surplus" or even had to make up a shortfall.

The Whole of Life phenomenon can be thought of as in the general class of "funding" shortfalls. At the height of their popularity interest rates were mid teens. In those circumstances it is very difficult to know what to fund for long term goals. If you want the funding guaranteed that might mean doing the calcs at, say, 4% and most would have thought that amounted to serious over-funding and would have been interpreted as overselling. Therefore the concept of funding at higher more realistic (but not guaranteeable) rates such as 8% took hold. But that has now turned out to be hopelessly optimistic and so people who funded for their pensions face shortfalls, similarly DB pension schemes face deficits and need increased contributions. Likewise WoL policies have turned out to be seriously underfunded and contributions (premiums) need to be increased. Was this properly explained? Possibly not but we should bear in mind that the examples on the Joe Duffy show are a very tiny minority of the tens of thousands of these policies that were sold. It seems that most people accept the actuarial realities of the vastly changed financial environment.

terrysgirl33 said:

Endowment mortgage.

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The biggest problem with endowments is that they were not reviewed regularly. When most of them were sold, interest rates were very high and so the assumed investment returns were also high. Interest rates and assumed returns came down drastically, meaning you had to put more money into your endowment policy to meet the capital sum requirement at the end. Most people continued with the same amount for the term of the policy and fell short at the end.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)