Irish Life Assurance review: Premium increase x 4

medikate

My Mum received an assurance policy review today from Irish Life stating that if she continued to pay the same premium that her life cover would effectively halve.
If she wants to maintain the existing life assurance cover she will have to pay a nearly 4 times as much than the current premium.
Theres no way she can afford to pay 4 times as much on a state pension.

Last years review was static. How can they do this?

It been paid since it was Abbey Life > Canada Life > Irish life.

thanks

phormium

Because that is the nature of those products, the reviews as you get older mean that either the premium has to rise or the cover fall. Prices are probably higher than hoped due to the fact that I presume the insurance company has not made the return on it's invested funds in the past years as it might have projected as investment returns are low.

Does she still need life cover? Is she in good health? Might be worth trying a broker to see what a bog standard term life assurance would cost her, it may not be worth keeping paying the one she has. When is the next review due again after this one?

Crunchienut

Same happened me last year - I'm paying the same amount for less than one third of the cover I previously had. Like Phormium said, it's the nature of the business, the older you get the higher the risk.

coylemj

medikate wrote: »

My Mum received an assurance policy review today from Irish Life stating that if she continued to pay the same premium that her life cover would effectively halve.
If she wants to maintain the existing life assurance cover she will have to pay a nearly 4 times as much than the current premium.
Theres no way she can afford to pay 4 times as much on a state pension.

Why does someone on a pension need life assurance?

blindside88

If your mum is on a state pension and has no financial dependants I would advise her to have a look a a whole of life plan to cover funeral expenses only (provided she is still in good health)

medikate

thanks all for the info. apologies...I forgot to mention its a joint policy and both are on state pensions. When one passes away the other gets the payout. Both in good health.


Seems crazy that within 1 year the policy can change so much having paid in so much over the years.

the new premium is 400 euro a month. madness

Henry Ford III

blindside88 wrote: »

If your mum is on a state pension and has no financial dependants I would advise her to have a look a a whole of life plan to cover funeral expenses only (provided she is still in good health)

These reviewable unit linked policies are whole of life.

Henry Ford III

medikate wrote: »

thanks all for the info. apologies...I forgot to mention its a joint policy and both are on state pensions. When one passes away the other gets the payout. Both in good health.


Seems crazy that within 1 year the policy can change so much having paid in so much over the years.

the new premium is 400 euro a month. madness

Whats the sum assured?

blindside88

Henry Ford III wrote: »

These reviewable unit linked policies are whole of life.

Ah sorry, didn't realise it was unit linked

NewCorkLad

medikate wrote: »

thanks all for the info. apologies...I forgot to mention its a joint policy and both are on state pensions. When one passes away the other gets the payout. Both in good health.


Seems crazy that within 1 year the policy can change so much having paid in so much over the years.

the new premium is 400 euro a month. madness

When your parents were younger the cost to cover their lives would have been much lower, all the excess premium they were paying was invested in a unit linked savings plan for them. The cost of the life cover increased every year as they got older, it eventually exceeded the premium they were paying in and started to eat into the savings plan. Now years down the road the savings plan will be empty or close to empty so Irish Life will need to insist on much higher premium to maintain the life cover for the next 5 years when it will be reviewed again and possibly increased again. Very few of these type of plans are set up anymore because elderly people get caught in situations like this.

Your parents need to think about whether they actually need this policy and who the payout will be for or would they be better to cut their loses be happy that they have not needed to claim off the policy and enjoy their pensions.

medikate

Henry Ford III wrote: »

Whats the sum assured?

the original sum was just under 80K which has now dropped to 37k.

medikate

NewCorkLad wrote: »

When your parents were younger the cost to cover their lives would have been much lower, all the excess premium they were paying was invested in a unit linked savings plan for them. The cost of the life cover increased every year as they got older, it eventually exceeded the premium they were paying in and started to eat into the savings plan. Now years down the road the savings plan will be empty or close to empty so Irish Life will need to insist on much higher premium to maintain the life cover for the next 5 years when it will be reviewed again and possibly increased again. Very few of these type of plans are set up anymore because elderly people get caught in situations like this.

Your parents need to think about whether they actually need this policy and who the payout will be for or would they be better to cut their loses be happy that they have not needed to claim off the policy and enjoy their pensions.

wow! thats bordering on sinister the way they have these policies drawn up. thanks so much for putting it that way. I was finding it hard to get my own head around how these worked.