Insurance policy cut from $.1M to $24,000

The policy was for $100,000 assured on death and payable to my children, with a monthly contribution of $174. Payments were to be made until age 65 and then a pension of $750 would be paid back to me.

On April 27, after 29 years of payments, I was informed that I am no longer insured for the sum of $100,000, instead the policy is now worth $24,000. I was given two options. Either continue the payments of $174 and be reduced to $24,000, or increase the payments to $471 (about three times the current rate) in order for the sum to remain at $100,000.

There is also a deduction to be made for loans of $23K.

This would bring the expected amount to be paid to $77,000.

No mention of the pension.

To be clear, over the past 29 years, my payments have totalled $60,552, and if I continue to make payments until age 65, the total of $66,816, as contracted, would be paid by me. My estate would be entitled to a payment of $24,000. This is a serious devaluation.

The insurance company has never declared a loss, as far as I know. This devaluation by 76 percent is beyond my puny brain. Just last month it declared a profit of $117 million.

I have been to the Ombudsman, consulted my own lawyer, and sought out the Inspector of Insurance, and was told the same thing — the company can do this, because there is a clause in the contract that allows it to.

My purpose here is just to warn all policyholders to check their contracts. Apparently a life insurance policy is now a risk and is to be purchased with the same caution as buying stocks — there may be gain, or there may be loss. Too bad for you if you think an insurance policy is “assured” because it is not, and there is no one to stand by you.

Buyer beware.

JA DE SILVA St Joseph