Life Thought we had a Continuation Option...

Discussion in 'Insurance not covered in other forums' started by LostInFinance, 15 Mar 2019.

  1. LostInFinance

    LostInFinance New Member

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    Last edited: 15 Mar 2019
    We (my wife and I) are coming near the end of the 20 year term of a Life Insurance Policy. We're considering our options at the end of our policy, whether to continue or take out a new policy, etc. It's quite a while (15 years+) since we took out the original policy, and obviously don't recall all the details discussed at the time, but do recall the topic of 'continuation' coming up. We have a copy of a signed 'Reason Why' letter, sent by our adviser at the time (together with Policy Document), stating that a Continuation Option was included. It goes on to explain that at 'the close of the 20-year term a new policy can be taken out without evidence of health'.
    But when we look through the Policy Document now we see that Continuation is not included. ('Protection Continuation Option?' No.)
    To complicate things slightly, the adviser we dealt with is now retired, although the business has been transferred on to another reputable financial adviser.
    My questions are:
    Do we have any grounds now to have the Continuation Option re-added?
    Should we pursue that directly with the Insurance Company, or the Adviser?
     
    Last edited: 15 Mar 2019
  2. LostInFinance

    LostInFinance New Member

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    Anyone out there with any thoughts on this? Have we a leg to stand on?
     
  3. noproblem

    noproblem Frequent Poster

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    Surely the company are entitled to know about the health of customers before insuring them. As for a leg to stand on, I do hope ye guys have 4 of them.
     
  4. Monbretia

    Monbretia Frequent Poster

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    If you have a continuance option then the company doesn't get to know the up to date health of the customer, they just get charged the rate for their age at time of conversion, that's the deal with a continuance option and that's why it costs more than basic cover with an end date.

    Ask the company for a copy of your application form for starters.
     
  5. DeeKie

    DeeKie Frequent Poster

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    You do. You have a letter confirming your preferred route. Contact your advisor.
     
  6. SBarrett

    SBarrett Frequent Poster

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    Nope. Priced into the contract. You pay more each month to have the option. Most of the time, it's not exercised. Cover is priced at your age when option is exercised so the premium can be quite expensive. Reduced need for life cover in older age as you should have savings/ pension at that stage.


    He has a letter from a retired advisor, not from the life company. The advisor should have checked the policy docs before issue so it could have been corrected. If there's no continuation option on the contract, the life company isn't going to honour a retired advisors mistake 15 years later.



    Steven
    www.bluewaterfp.ie
     
  7. WhiteCoat

    WhiteCoat Registered User

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    Anybody know what the legal position/redress is here?
     
  8. Monbretia

    Monbretia Frequent Poster

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    Zero I'd imagine unless you find the continuance option ticked in the original application form. Up to customer to check policy when they got it to be sure it was what they wanted.
     
  9. Frank Underwood

    Frank Underwood Registered User

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    Hi OP,

    Did the broker give you a price including the continuation option when he came out to discuss the plan, fill out the application etc? If so, is that the price you have paid all along? Or did you pay a lesser premium (to reflect not having the continuation option)? If you have been paying a premium that includes the continuation option, they will have to honour it, regardless of the policy document. Do you have a quote from the time you took out the policy?
     
  10. LostInFinance

    LostInFinance New Member

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    Thank you all for your helpful replies, and questions ..

    @SBarrett
    The business was transferred to another advisor, and he confirmed that he also has a copy of the letter. According to him the 'Continuation Option' wasn't selected on the application form but I'll double check that with the insurance company.

    @Frank Underwood
    I'm afraid we don't have the original quotations. We only kept the policy document and this *Reason why" letter.

    @Monbretia
    I take your point and realise now that we made a mistake in not spotting this in the policy document. But I presume the purpose of the "Reason why" letter was to spell out in plain text what we'd signed up for. And it did spell out what we'd discussed, and thought we were signing up for.

    It appears to me that we were mis-sold a policy, to our cost. Now our health circumstances have changed and we will need to extend it, so the cost could be significant

    Should I pursue it through the Advisor, another Advisor.or seek legal advice?
     
  11. Frank Underwood

    Frank Underwood Registered User

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    If you haven’t been paying for this benefit, didn’t select it on the application form and it’s not on the policy document I don’t think you have any case tbh. You could outline what you have done here in a letter to the insurance company but I don’t think you have a leg to stand on. If you didn’t select it on the application form and didn’t come back during the cooling off period to say your policy was incorrect why should the insurance company take the hit. They followed your instructions. And you never came back to say there was an error. I would be very annoyed if I was you. As you wanted to have this benefit and pay for it from what you say.
     
  12. LostInFinance

    LostInFinance New Member

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    A quick update on this:
    I have now found more correspondence prior to setting up the policy. In particular, there is one letter with quotations from 6 providers. One quotation is provided in detail, it summarises the options, and states 'Convertible : Yes'. This one was at the exact price with the provider that we later signed up for. Also, the letter explains the 'Continuation Option', similar to the wording in the 'Reason Why' letter.

    There are a number of other letters on the subject, and all make reference to the 'Continuation Option'. My recollection is that taking out a policy without 'Continuation Option' wasn't even considered at the time.

    @Frank Underwood
    I will pursue it now with the the Insurance Company based on the correspondence at the time. If they are not forthcoming, what other avenues could we pursue?
     
  13. SBarrett

    SBarrett Frequent Poster

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    You need to get sight of the original proposal form. That is your contract with the insurance company. The Reasons Why documents is nothing more than a regulatory document that has to be given by the advisor laying out their reasons for recommending the product and provider. It has nothing to do with the life company.

    If the Continuation Option box is ticked on the proposal form, the insurance company will honour their mistake, if not, they won't honour the mistake of an advisor 15 years later.


    Steven
    www.bluewaterfp.ie
     
  14. Frank Underwood

    Frank Underwood Registered User

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    I would follow Steven’s advice and get a copy of the application form. You will then have all the documentation (as you say you have the reasons why letter and the policy document). Come back to us when you have sight of the application form. I don’t know if there’s any point going to a solicitor about this if the insurance company are not at fault (assuming you did not tick yes to the continuation option on the application). F
     
  15. moneymoneymoney

    moneymoneymoney New Member

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    I think if the proposal has it ticked you have a chance,however if application is not ticked it really was up to you to ensure the cover you held was correct. reason why statements are nothing to do with the life company
    sometimes it's cheaper to take out a new plan,rather than converting an existing plan. hope this helps. think you might be wasting money on solicitor etc as you signed application and it was 15 years ago. let us know how you fair out..
     
  16. Ravima

    Ravima Frequent Poster

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    Was the intermediary an independent broker or a tied agent? You probably have a better case if the latter.