Relating to Money Marketing’s online article, FOS raises concerns over whole-of-life policies, Eleanor Downie (FCII) and myself raised this question 12 months ago.
We carried out some basic research across several companies and found a wide diversity of approach by insurers.
Regulatory and statutory constraints work against guaranteed products (fixed sum assured/fixed premium with accumulating surrender values) and yet provide little guidance for underwriters.
The difference in treatment of published and what now appear to be increasingly popular “annual” reviews.
There is no doubt in our minds that certain life companies are milking the system and effectively “dumping’ older lives in order to improve their balance sheets from increased premium income and reduced risk.
The regulator knows and ignores the symptoms and the disease. It has to be stated that some companies not only honour their contract terms but communicate effectively and in the life assured’s best interests.
The whole of life insurance market requires a sensible detailed appraisal before yet more damage is done to a very important sector of the life assurance industry.