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FSA misses the point over vital whole-life cover

Has the regulator lost it completely? How can wholelife insurance be bad for people (Money Marketing,December 16, 2004)?Whole-life insurance is a basic fundamental platform on which all life insurance and future security for families and business rests.

Term insurance is Crap (Contrary to Recognised Actuarial Principles).

Actuarially, a select male life aged 20 (that is someone who would be eligible for life insurance at ordinary rates of premium at that age) will live until they are 80 and a female aged 20 from that same select group will probably live until they are 87.

Most term insurance expires by 65 and a lot of it is of far shorter duration and sold by banks or minimally registered individuals.

Regulators have been very slow to recognise that it is term insurance that it being abused in the marketplace, not whole-life insurance.

Unlike the mass marketing by Jason King of Life Policies Direct that you quote on your back page, I can hardly ever see when term insurance should be sold.

If 17 per cent of males die before 65, then 83 per cent of them die after that age and therefore need whole-life insurance to protect their families or to protect their businesses. Indeed, in many circumstances, only whole-life insurance can look after both these interests.

For one of your commentators to say it should only be sold for inheritance tax purposes merely shows their ignorance of the facts and the way that our industry has been purged of true professionals.

For the regulator even to try to insinuate that wholelife policies have been missold (and I cannot believe there would be many salespeople who would actually sell a whole-life policy as an investment plan) is to fly in the face of reality.

We should be selling whole-life insurance by the bucketload because the statistics show us that 50 per cent of 20-year-olds will find themselves at 45 and beyond either uninsurable or with heavy premium loadings for medical disabilities. That means a very uncertain financial state for their familiies and business colleagues.

Terence O’HalloranO’Halloran & Co,Lincoln

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