Moneywise helps a reader with soaring insurance premiums
I have just received a ‘review’ from Aviva on a former AXA Equity & Law whole-of-life/critical illness plan, which is asking me to increase premiums by 89% if I want to retain my £200,000 cover level. How can such an increase be justified?
NM/Bath
This sounds shocking, but Aviva has an explanation. An Aviva spokesperson says: “This customer has an ex-AXA Equity & Law Multiplan, which is a reviewable whole-of-life policy linked to a managed investment fund and was taken out in 1994. It provides cover in the event of death, critical illness or in the event of permanent disability.
“Policies such as these are periodically reviewed in order to determine whether the level of cover provided can be sustained by the premiums and if not, to notify the customer of their options to reduce the level of cover or increase their premiums to keep the cover at the same level. One of the factors that will determine the outcome of a periodic review is the investment performance.
“In the case of this customer’s policy, it was regularly reviewed as part of the terms of the policy. Previous correspondence to the customer in 2014 indicated that the chosen level of benefit would not be sustainable at the next review in 2019. The customer was informed that an increase in premiums would be required, or that there would be the option to reduce the benefit.”
The company suggests that NM talk things over with a financial adviser.
NM wasn’t happy with the response.
“I think it is waffle. It provides me with no positive solutions or explanations as to why an 89% increase in premiums can be justified. This was mis-sold tothousands of people as a protection plan when it is really a highly volatile investment-based policy.”
The next step would be to look at how the product was initially sold those years ago and whether it was fair. It is true that the reason for the premium increase is because of the investment performance. Aviva is looking into the issue of mis-selling, but this doesn’t mean that it was mis-sold.
OUTCOME: Aviva will check whether this 25-year-old policy was mis-sold
Section
Free Tag
Workflow
Source Moneywise http://bit.ly/2B546Ab
ليست هناك تعليقات:
إرسال تعليق