'Beware the ‘Over 50 Sun Life Axa Plan’... blog discussion

A question about : 'Beware the ‘Over 50 Sun Life Axa Plan’... blog discussion

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's Beware the 'Over 50s Sun Life Axa Plan.' It often pays out less than you put in Blog.

Please click 'post reply' to discuss below.

Best answers:

• It's a "Whole Life Non Profit" assurance which is guaranteed to pay out on death whenever that my occur, EXCEPT that it only returns premiums paid if you die before two years; this is how they are able to offer "no medical details required".
  So, the old adage is "Only those that want life insurance can't buy it". The plan's no good if you are in ill health because of the two year "moritorium" on payouts and no good if you are in good health because of the low sum assured.
  Michael Parkinson should be ashamed of himself!
• thought it was after 2yrs they pay out on death? will have to look at the conditions
• yes beware my father paid into this plan for 23 years @ 11.70 per month and when he passed away last december they paid out a paultry Ј880.00, he would have been better off putting his money into a building society for 23 years i was so angry will this company.
• So, if we graph it...
  Forget that for a laugh.
• With Sun Life AXA, the returns aren't in direct proportion to the premiums. Very small premiums get a very poor deal, bigger premiums do better pro rata.
  Other companies in the business probably do better than Sun Life AXA.
  But the deal is a lot better if you start young, i.e. 50 rather than 65. Distinctly misleading of the adverts to use celebrities who are well past pension age.
  Not sure it's fair to quote official life expectancies, because the policy-holders are a self-selected sample. A man who takes out life insurance at 65 has probably had a few twinges. People who expect to see 90 don't take out the policy, and this skews the customer base.
• If you think about it even just a little, assurance providers offer these 'whole of life' products in order to make a profit.
  Yet they pay out based on something that is guaranteed to happen eventually. So if all policyholders pay their premiums until the day they die, the average policyholder HAS to be making a loss in order to create that profit for the assurance provider.
  However, of course, some people with Martin's help will realise that they're getting ripped off, write off previous premiums as a sunk cost and stop paying into their plan, providing a nice little boost to Sun Life Axa's coffers that could go into underwriting a fairer payout for the smaller number that plug away paying their premiums. Or, alternatively, it could go towards paying Michael Parkinson, buying hours of TV advertising and giving away what must be thousands of free Parker pens. Or, alternatively, to bigger profits.
  The trick for Sun Life Axa is to get as many people as possible paying premiums in the first place who then later discontinue their plans and thereby renounce their right to the payout upon inevitable death that those previous premiums were supposed to be buying them. Can't imagine then they'll be too worried about Martin denigrating their plans and helping a few people to with the surprisingly difficult task of rationalising the sunk costs involved.
• I would personally avoid anything that has Axa Sun Life printed on it. They are not at all keen on replying to letters, emails to complaints or carrying out simple requests such as, would you please send me an encashment form
• and there was me looking forward to turning 50 next yr so I could take out a policy, collect the free sat nav to leave to my daughter along with the pay out to find the way to the funeral home...............me thinks I would be better off buying a funeral plan with the co-op to meet such expenses in advance, as she is gonna do fine out of my house and her dads house so not exactly gonna be hard up when she reachs middleage.
  https://www.co-operative.coop/funeral...thly-payments/
  for me when I turn fifty next year the amount ranges from Ј20.59 to Ј24.50 pm for rest of life but the funeral would be paid for in full -and no messing around with the insurance company to arrange payment either or pay in full from 2700 to 3240 but guess it depends how long you live to see if pays good return but seems better deal than sun axa
  I wonder if they offer this on any of the cashback sites .................! well may as well try and get some benefit for me whilst I am here to enjoy it
• lemontart, there's no need to mess around with an insurance company to arrange payment. Present a death certificate and invoice for funeral costs from an undertaker to a major bank like NatWest that you have an non-joint account with and they will send to the funeral director a check for the costs, provided the account has sufficient money to pay them. No need for a will or appointed executor. Check with your bank and find out how they handle it. Takes less than a week for NatWest to take care of it.
  Ј2700 is more than a simple funeral with cremation costs. You've little chance of dying before you're paid out more than the cost of this plan, since it takes only eleven years, ignoring inflation, to pay more than you get out (assuming Ј2700 and Ј20.59). At 3% inflation, in today's money that Ј2700 would be worth just Ј1950.
  Best to enjoy the money while you're alive and just keep normal emergency funds around. Those will be sufficient to cover the funeral costs and your daughter will surely be happier for you to have been better off for the 38 or so years that half of today's fifty year old women can expect to live for.
  Most people under-estimate how long they live. Even the press routinely gets it wrong, as the Times seems to have done here, by using life expectancy at birth instead of cohort life expectancy for those of the age being considered. Life expectancy at birth is many years less than the average age to which someone who has already survived childhood illnesses, teenaged accidents and early heart attacks can be expected to live. Women aged 49 today will on average live 39.6 more years, men 36.3 years.
  For a man aged 65 today the expected number of years to live is 21.3, to age 86.3. For a woman it's 23.9 years to age 88.9.
• the co-op thing is a pre paid funeral plan with the funeral directors not an insurance company alot of funeral directors have these but have tie in with their federation so if the company goes under (no pun intended) your saving is protected they aslo offer a arrangement to pay in full over a period of time or one off payment which is probally the option I will take so I know that is covered. My mother has already done this. Like many others I live month to month with no savings as cannot really afford to save at moment but want to know this is dealt with having survived cancer 2x and now on 3rd lot it is a peace of mind thing.
  when my father died a few years ago it was awful trying the get the money together for his send off and repatriation to Ireland and no way do I want that for my daughter.
• Sadly I have an elderly relative who's been paying into this plan for many years, had he understood the implications of it paying less then there's no way he would have taken it out. How can they do this to vulnerable elderly people and be allowed to keep on doing it?
• As if a Multi Millionaire like MP needs the money, ditto June Whitfield.!
• I don't think I could ever use companies like AXA or any other "life plan". You are basically giving your money away to these companies. Sticking Ј10 a month in to a savings account isn't hard work and come death, you'll have much more money than what these companies would pay out.
  My grandmother has one of these stupid plans and pays Ј5 a month to them, she's in pretty good health and she'll no doubt pay in more than what will be paid out. I've told her countless times she'd be better off sticking the money in a savings account but it doesn't seem to be getting through to her. All the money that she has paid in is most likely sitting in the companies bank accounts or whatever, earning them interest so they can buy their lavish mansions, pay for celebrities to do their adverts and whatever else.
  It's a total con.
• perhaps you are confusing an insurance prouct with an investment plan.
  If it is insurance, then it means you are paying for peace of mind.
  if you want to make a return on your savings , then as Martin suggested, go for investment advice.
  .
• Twenty years ago, my first full-time job was for a life assurance company, and I had to work on the section that administrated the claims on this type of policy - that's how long they've been around. I spent two years having to explain that the terms of the policy were made clear at the outset, that no health checks had been made, and that the policyholder knew what the payout would be. All of which were true, but that didn't make the policy seem any fairer. I hated it.