An adviser has warned IFAs to beware of offering renewable term policies after a client’s policy was sold and the renewable option withdrawn.
King & Co Financial Services arranged for a client to take out a renewable 10-year term policy with Zurich which was due to be renewed on August 1.
On contacting Zurich last month, King & Co was informed that the policy was part of a book of business that was sold to Windsor Life, which is owned by Swiss Re, in 2003 as part of a closed life book sale.
Windsor Life told the firm the renewal option is not available and offered replacement cover for a whole-of-life policy.
A Windsor Life spokeswoman says: “Where a maturing policy has the option to renew, Windsor Life will offer a product that most closely matches the original contract.
“Due to the nature of Windsor Life closed book business, the new policy offered does not always match the original on a like-forlike basis.”
Zurich UK Life head of UK operations Tim Culling says: “Swiss Re confirmed to Zurich and the FSA that it would honour all contractual policyholder benefits.”
King & Co paraplanner John Smyth says: “Advisers should know that the renewable option is not worth the paper it is written on in this situation and yet people are paying more to have a renewable option.”