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Public believe the price is right for valuable life cover

Is this what the argument is all about – £189m a year in

excessive commission (ABI statement) or 25p a week for the 10 million

new policyholders?

Is that what Sandler is all about? Is that why we need to reverse

polarisation? It is about time the control freaks got real.

If my father had life insurance on my mother when I was four years of

age, he would not have had to work round the clock. He was a master

tailor, he died broke but it did not make him a bad man or a bad

tradesman, any more than one inane comment in your last edition makes

“small intermediaries who are undercapitalised” bad financial

advisers.

Mary and her seven-year-old daughter did not bother about commission

when her husband died servicing an aeroplane. She was able to buy

her own home and the two of them live in their own world because of a

small family income benefit policy and whole-life insurance.

Gwen wished she had taken out a family income benefit policy when her

41-year-old lorry-driver husband had a heart attack and left her with

sevenand nine-year-old daughters, even though the life insurance

salesman had succeeded in setting up a low-cost endowment that paid

her mortgage off. She was not worried about commission and the ABI&#39s

25p a week.

Chancellor Gordon Brown takes almost 17 times that £189m out of

charities in back-door taxation every year. He takes 26 times that

from pension funds every year. Where are the headlines? Where is the

Sandler committee to investigate that?

Polarisation is understood by the public but does not suit the banks.

Perhaps they want their own products and their own huge margins to

make up for their other inadequacies. Ten years ago on PIMS, we were

told by an arrogant banking economist that they could do the life

insurance job at two-thirds the price. Where are they and why haven&#39t

they?

Perhaps it doesn&#39t suit the fund managers, either, with their

short-termism, high-cost advertising campaigns and lack of

responsibility for their investors&#39 decisions.

It is the life insurance industry that provides the banks with their

capital through share ownership and keeps the supermarkets afloat,

along with entrepreneurs, whose external funding appears to be the

life insurance and pension funds that are ridiculed so readily.

You would do well to question Mr Davies at the FSA on his motives,

and the ABI and Mr Sandler on their arithmetic, if all it costs is

£189m a year in what they call expensive products for people

like me to sort out a widow&#39s trust when her husband dies or to spend

hours sorting out somebody&#39s will when they are on their deathbed or

to ensure someone goes on three cruises a year by providing them with

enough income in retirement to help them do that or to put

£200,000 into a business when one of the senior partners dies

and the banks freeze its bank accounts.

Don&#39t talk to us about 25p a week or the dismantling of polarisation.

The dubious extravagances of bureaucrats and their sub-contracted

firms in the so-called pension misselling scandal and the unnecessary

letters to 13 million endowment holders are their testimony to the

fact that many, if not most, of those review bodies could be better

employed to ensure that the railways are run properly, the health

service is properly administered, foot and mouth was adequately dealt

with and BSE is dealt with efficiently.

Enough of smoke and mirrors. Leave us alone. A period of

consolidation is what the life insurance and pension industry needs

so that we can continue doing our good work despite efforts to stop

us.

Terence O&#39Halloran Chartered insurance practitioner,

Newland, Lincoln

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