Life care Policy

[Molly100]

Hi There,

Myself and my wife bought a house in July 2002 via our bank branch while at the same time taking out a Life Care Policy for both of us with them via their Life Group head office.

We were told at the time that for the €145 per month for this (Whole of Life Policy?) would include:

200k policy for her death and 300k for mine plus Critical illness Plus for both of us ( 33k and 88k respectively).

I had requested at the time that the type of policy I wanted would also include a value at a future date where could take money out in 8-12years but still continue the policy.

The seller at the time confirmed that this policy was the one to go with. ( at some stage( after 2-3 years you will have paid enough that part of your mthly payment will now be invested on your behalf)

At the start of this year I decided to make sure that the above was the case as I had phoned their head office and alarmingly they told me that my policy was not in line with the above.

I then met with my branch whom had a new Insurance advisor to go back over the details and he once again confirmed that the original was the case but despite reminders I cannot get documentation to prove so.

Two weeks ago I phoned their head office to find out would my policy indeed have a value at any time during its life. I was in no uncertain terms told that the most it would ever be valued was at €150, the now monthly cost.

Now after contacting the branch again while talking to the insurance advisor he claims they are incorrect and I am now still waiting for documentation from him with no luck.

At present as we have no kids I am thinking that we are over insured as we both have salary protection and death policies through work. I do however still like the sound of having a policy which you pay into for several years but will eventually be able to get some money back as part of your contributions is been invested. ( this is what I've been told I have)

Can you advise the next step for me, obviously I'm going to talk to the branch Manager but would like some guidance further if possible as I'm getting total conflicting views from the same company.


Thanks

 

[Pexus1976]

You have bought youself a savings policy with a built in life clause. These are very popular with brokers as the commission on these payments can be up to 90%

At the end of the day you will not make much money from this type of policy as most of the premiums your contributing is eaten up by the life assurance part.

Who advised you on such a policy and why where you looking to invest in such a policy.

Would it not be more realistic to cancel the policy you have and take out a separate life assurance and a savings policy.

Regards
Paul

 

[oysterman]

At present as we have no kids I am thinking that we are over insured as we both have salary protection and death policies through work.

Molly, you've really answered your own question here. A number of previous threads on AAM all seem to agree on one thing - if you have enough of this cover through your job then buying it seperately is a daft use of your resources...sky-high deftly concealed commission and hugely restrictive terms on the PHI.

 

[harvey]

Ask for a copy of the proposal form and a benefit statement and even a printout of their screen. Unit linked whole of life can be bad value for money and one certainly pays for the flexibilty. Go as far as asking them for the breakdown of costs associated with both life cover and serious illness. Both serious illness cover and life cover have gone up in price in the past 3 years as much as 50%. I have no doubt though they are charging for it policy is not a term based guaranteed product.

If you want to get a rough idea of cost of basic life cover have a look at www.hibernian.ie. or The price and cover are guaranteed. Serious illness can also be taken out separately or perhaps the life cover can be removed from your existing Life Care policy. This is why I would never deal with a bank, the person who always sells the initial policy is never there in a couple of years to answer your query. Go talk to a broker who will be able to tell you what is right for you. What is your definition of over insured ? I bet you are not. A work colleague's brother died and eventhough he had cover of 3 times salary and mortgage was paid off his wife has to go out to work because they have 4 young children and she felt that if she didnt get back into the workforce that there would be problems in a couple of years with money. the amount left was in the region of 130K after credit cards and couple of other debts were paid off.

 

[oysterman]

over insured ? I bet you are not. A work colleague's brother died and eventhough he had cover of 3 times salary and mortgage was paid off his wife has to go out to work because they have 4 young children and she felt that if she didnt get back into the workforce that there would be problems in a couple of years with money. the amount left was in the region of 130K after credit cards and couple of other debts were paid off.

Without wishing to be insensitive, this is precisely the sort of anecdote that makes people get themselves over-insured in the first place. The original poster and spouse are both working and they have no children i.e. their situation has nothing in common with that of the unfortunate widow mentioned above. If you have no dependants then you very rarely need life cover beyond paying off joint financial commitments like a mortgage on a jointly owned PPR.

There's plenty of time for getting a load of life cover when children come along. Until then? Spend it on yourselves, not some slick salesman with a nice line in hard luck stories.