Whole of Life Insurance Policies

What are they?

As the name implies, whole of life insurance policies give you protection for life. Unlike term insurance that only pays out if you die during the term of the policy, a whole of life insurance policy always pays out eventually.

Whole of life insurance is designed to lasts throughout your life, unlike term insurance which is for a specified period only. This is so that your dependants would be guaranteed a payout.

For this reason whole of life insurance can be more expensive than term insurance, although this is not always the case.

Whole of life policies were made to seem attractive because most (but not all) have an investment element and therefore a surrender value. If, however, you cash them in you cancel the policy and lose your life cover and incur large financial penalties.

Where does the problem lie?

Whole-of-life policies are investment-based. Typically, policyholders pay a monthly premium that buys units in an investment fund. Some of these units are then cashed by the insurance company every month to pay for your guaranteed life cover. How many of your units are cashed will depend upon the level of cover you required.

It is likely that after five or ten years, either your premiums will rise for the cover to be maintained, or the cover will be reduced so that your premiums will not have to rise. With standard cover you should not have had to pay higher premiums as long as the underlying investment fund performed satisfactorily. In many cases this level of performance has not been achieved and many people are seeing this scenario arise.
Though the idea of permanent cover for life sounds appealing, whole-of-life policies present too many complexities. They tend to be swamped with charges and many people buy plans in the expectation of building up a juicy investment fund. Such expectations, often fuelled by commission-hungry salesmen, are rarely fulfilled and a great number of policyholders surrender their policies early.
Some experts believe that you should never mix savings and insurance within the same plan - which is exactly what a whole-of-life policy does.

How can we help?

When any financial product is sold to the public then there are many different rules and regulations set down by the FSA that the salesman must adhere to. These stringent controls which are put in place are there to protect the consumer from being misled. Unfortunately this doesn’t always work as many salesmen negate to give all the facts or even in some cases bend the truth.

The good news is that there is a comprehensive arbitration process which enables people to detail there grievance and seek financial redress should they fall victim to this type of mis-sale.

Day Cooper Adams are specialists within this field and we assist our clients in achieving redress to compensate them for the ill advice they have received. Because we detail our clients’ complaint in clear and concise manor and present the exact points of mis-sale relevant to there case we accomplish great success with the claims which we choose to take on.

If we can establish that you have been a victim of a mis-sold whole of life policy then you could be entitled to claim back thousands of pounds in compensation. In the event that a claim is upheld then you would be refunded all the premiums which you have paid plus any lost interest.  

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