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Life Insurance "Whole of life policy"

  • 22-01-2014 8:20pm
    #1
    Registered Users, Registered Users 2 Posts: 4,629 ✭✭✭


    My wife has a "whole of life policy" connected to her apartments 35 year mortgage. For the past two years the company have been ringing her asking her if she wanted to change her policy, that they had better options for her etc. It has gotten to the point where she has stopped taking the calls or ringing back.

    Now they have sent her a letter saying that the policy is currently €*** per month and will be up for review in 2016 ( ten year anniversary ?) and that the current encashment value is €*****.

    They feel they can get her better value for her money etc. etc.

    The letter ends with

    " There is an opportunity available to take out a Convertible Term Assurance policy with the same benefits as your current policy but a lower monthly premium and the opportunity to encash your current policy"

    When she took out the policy she was told it was a really good policy and not to move from it. She feels that they are badgering her to get her off this "better" Whole of Life policy onto a worse policy .

    Any advice would be very appreciated.


    EDIT: I should add that it is the Mortgage Broker who got her mortgage doing all the contacting, NOT the policy company


Comments

  • Banned (with Prison Access) Posts: 1,288 ✭✭✭sawdoubters




  • Registered Users, Registered Users 2 Posts: 25,624 ✭✭✭✭coylemj


    EDIT: I should add that it is the Mortgage Broker who got her mortgage doing all the contacting, NOT the policy company

    Has that broker asked her any questions about her current situation - employment/unemployment, marriage/divorce, kids etc? If not then they are purely motivated by the commission they will get if they persuade her to take out a new policy.

    She should seek independent advice, I'd suggest not that broker, the alternative is to do nothing. I'm surprised that she has a whole of life policy to cover a mortgage, that's normally done with a standard mortgage protection policy which would be a lot cheaper than a whole of life policy.

    What she could consider is cashing in the policy and then taking out a bog-standard mortgage protection policy, you can get quotes for these on all the major insurance company websites without going to a broker. The premium is based on the person's age, the amount to be covered (i.e. the current balance on your mortgage) and the number of years remaining. Such a policy has no payout when the term ends, it only covers you for death during the term and it's only designed to pay of the outstanding mortgage so it is not a savings policy. Because of competition and the ready availability of online quotes, brokers will not try to sell you this type of policy, that's why they are pushing that convertible term policy - more commission for them.


  • Registered Users, Registered Users 2 Posts: 4,629 ✭✭✭googled eyes


    Thanks for the reply. We were talking about getting independent advice this evening and I just said I'd ask the good people of boards ( since that would be the only place to reply after hours).

    Im not sure why she has the whole of life cover? Maybe she was advised at the time that it would be the best option for the future ( She's asleep now, I'll ask her tomorrow)?

    I thought the company were just pushing for the hard sell or maybe the Insurance company are trying to get people off "whole of life " policies as they are bad for business?

    It's quite confusing


  • Registered Users, Registered Users 2 Posts: 33,518 ✭✭✭✭dudara


    Moved to Banking & Insurance & Pensions.

    You are better off betting independent advice. Even Boards isn't foolproof :)


  • Registered Users, Registered Users 2 Posts: 4,629 ✭✭✭googled eyes


    dudara wrote: »
    Moved to Banking & Insurance & Pensions.

    You are better off betting independent advice. Even Boards isn't foolproof :)

    Thanks for that ;)


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