When I turned 18, I did two things that signified for me my coming of age. I opened a bank account, and I took out a life insurance policy.
An agent of Colonial Life had come to our home pursuing our business. Convinced by his booming presence, and his knowledgeable, sophisticated air, I thought it would be foolhardy not to set about saving for that future everyone talked about protecting.
I signed the forms, paid the premium got a receipt and felt like I had truly stepped into adulthood. He came monthly to collect the cash, issued a receipt and went his way.
A couple years passed. I wanted to take a loan and I thought to enquire how my policy could work for me. To my horror, the policy had died because only the first three premiums had gone into it.
Mr Man had been pocketing the premiums and had been discovered and dismissed—but I had not been informed. In that common state of working class ignorance, I didn’t think there might be any recourse other than to cut my losses. It was a harsh awakening.
Nearly 15 years ago, I had another experience which didn’t include a conman. I took out a life policy, paid a year’s worth of premiums and forgot about it. I never received a notice from the company, British American, that premiums were due and when I eventually checked, I was told the policy had lapsed.
Perhaps I should have been more diligent, but I believe that institutions should inform you of your due dates. Up to this year I realised they feel no such duty.
Car insurance is a legal requirement, and for years I would receive notifications from Colfire—by mail, email, phone-call—when it was due for renewal. I had received none. It was only when I was making a list of things I needed to attend to (like vehicle inspection) that I realised I couldn’t find the certificate.
I called to ask about its status and was told I had not renewed it since 2020. I had been unwittingly driving for two years without insurance!
The company barely apologised for not sending me renewal notices, and said I could not simply renew, I would have to initiate a whole new policy.
These are just a couple of my experiences and not the thrust of what set me down this track today. This has to do with a life assurance policy my mother had taken with Guardian Life in 1999—23 years ago. It was a small one, with a death benefit of $50,000, and she made me and her now deceased husband the joint beneficiaries.
I had not known of this until his death when she asked me to hold on to the policy. I had never paid attention to it, but recently as I was making my will, I came across it.
It occurred to me that since she was planning to have cataract surgery and some knee treatment, it would be a good idea to just surrender the policy so she could use the money this way.
I suggested it to her and she objected, but I persuaded her that we could at least update the beneficiary name and check what the cash value of the policy would be.
She grudgingly agreed and we found ourselves at the St Augustine branch of Guardian Life, having already enquired if the policy could be surrendered and what documents were necessary.
As an aside, while we were waiting, a CSR approached with a tablet containing a questionnaire about the service and other things. If I could fill it out while we waited they would appreciate it.
After a few moments, I caught her attention and said I could not possibly respond to a question that asked how I rated the speed and efficiency of the service when I was still waiting to experience it.
It turned out to be a fairly lengthy wait, and when we got to the counter, we were told that there was nothing that could be done with that policy. It could not be altered, it could not be surrendered and for it to reach its cash value, premiums would have to be paid until 2031, or my mother’s death. Nine years away.
My mother is 76, and in far better health than I am—I’ve always assumed she would outlive me. But I was mystified by this information.
Why would someone be sold a policy that offered no personal benefit?
What I gathered from the conversation at that office was that there was absolutely nothing she could do but continue paying premiums.
I looked at the policy because I wanted to write about this, and saw that the letter accompanying the new policy described a conversion option: “which allows you to convert it to any permanent type plan then offered by the Company” (something similar) without “evidence of insurability”—and the capacity to use it as collateral for a bank loan.
None of this was communicated to her or me.
I had intended to question how people could sell policies that yielded no living benefits, but then I realised that this was not the issue. It was simply that these companies do not feel responsible to communicate with their clients. Or maybe their staff don’t know the regulations.
Either way, it feels like a rip-off.