Life cover pre­mium dou­bled at age of 89

The Daily Telegraph - Your Money - - YOUR MONEY -

For the past 20 years John Thacker has paid more in pre­mi­ums than his whole of life in­sur­ance plan will pay out, writes Amelia Mur­ray.

Over two decades Tele­graph Money es­ti­mates he has spent £6,803 in pre­mi­ums which will pay out on his death £5,000 for his fu­neral ex­penses.

When he took out the Scot­tish Wid­ows Life­time Se­cu­rity Plan in 1996, Mr Thacker, 89, was happy to pay £27.05 a month. In 20 years, the plan has been re­viewed on sev­eral oc­ca­sions and Mr Thacker’s pre­mium has been in­creased each time to en­sure the £5,000 cover re­mains.

How­ever, at 89-years-old Mr Thacker was shocked when Scot­tish Wid­ows wrote to him to tell him his £32.53 pre­mium was to be dou­bled to main­tain the sum as­sured. If he did not in­crease his pay­ments, he was told his cover would plum­met to £3,115.

The re­tired farmer, who has lived alone in Worces­ter­shire since his wife died 15 years ago, says he can barely af­ford the cur­rent pay­ments on his mod­est state pen­sion, let alone £64.23 a month.

Scot­tish Wid­ows said in a let­ter that the re­views formed an “in­te­gral part of the con­tract” and sug­gested Mr Thacker con­sider whether con­tin­u­ing with the plan was “in his best in­ter­ests”.

If not, he could “sur­ren­der the resid­ual value” – in­sur­ance jar­gon for cash­ing in the plan.

Mr Thacker said the let­ter was “such a shock” and left him feel­ing deeply dis­tressed. He said: “I’ve got to pay dou­ble or the sum as­sured will be al­most halved.

“It’s just sense­less. It seems as if Scot­tish Wid­ows can just do what it wants. What’s to stop them charg­ing me £1,000 per month next year?”

Af­ter be­ing con­tacted by Tele­graph Money, Scot­tish Wid­ows agreed to freeze Mr Thacker’s pre­mium at the cur­rent £32.53 and make no fur­ther re­views. A spokesman said: “We ap­pre­ci­ate that Mr Thacker has not had a sat­is­fac­tory com­plaint ex­pe­ri­ence over the past six weeks.

“Given this, and the elapsed time, we don’t want to cause him any more dis­tress and in­con­ve­nience so, as a ges­ture of good­will, we will freeze his pre­mium at £32.53 per month and guar­an­tee the £5,000 sum as­sured on death.

“We also com­mit to no fur­ther pre­mium or sum as­sured re­views.”

Oth­ers in his po­si­tion may end up cash­ing in plans or bat­tling to con­tinue with pre­mi­ums – only for them to rise again fol­low­ing fu­ture re­views.

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