Call for lapse rates to be monitored by insurers
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.INSURERS are concealing pounds 300m in losses to consumers caused by the lapsing of policies, the Consumers' Association said yesterday.
The figure referred to surrenders of life and pension policies in their first year alone, but insurers are keeping the true scale of the problem under wraps, the association claimed.
In the light of the scandal over poor pensions advice, lapse rates should be used to clamp down on companies that mis-sell insurance and pensions, it added.
Jean Eaglesham, head of money policy, said: 'Information on how long insurance policies last, and who sold the ones which are most often cashed in early, is crucial to consumers. It puts an insurance company's record on public view.'
Recent figures showed nearly one in four unit-linked life policies and more than one in four unit-linked pensions policies lapse. For other policies, the rates are 15.4 and 23.7 per cent respectively.
The association wants to see regular publication of information on how long policies last and who sold the ones that lapse most. It is also pressing for publication of 'trigger' levels of persistency of policies - so that if a company's representative falls below, the advice he or she offers can be investigated.
'Poor advice often leads to a discarded policy. Every year millions of investors lose out,' Ms Eaglesham added.
The association's magazine Which? criticised the high cost of credit insurance on a personal loan which adds, on average, 65 per cent to the cost of borrowing.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments