Financial Conduct Authority Concerns On Over 50s Life Cover

Much to our shock, more than 30 years after we became aware of the issue, the FCA has published warnings on the unsuitability of Over 50s lIfe cover as funeral plans. We assume due to the lack of inflation proofing and the issue of no cash value if payments are missed.

Misleading Financial Promotion for Over 50s Life Cover.

The financial promotions team of the Financial Conduct Authority have seen promotions for Life Policies for the over-50s life cover where we believe consumers could be misled into thinking they are buying a policy that will cover their funeral costs. Proceeds of these policies can be used for payment of, or towards, the cost of a funeral. However, it is important that, if a firm’s promotion refers to funerals and associated costs, consumers are not misled into believing they are buying a funeral plan that will cover their funeral costs in full.

Over-50s Life policies are widely promoted through various media channels, including television advertisements. They guarantee to provide Life Cover for the over-50s without the need for customers to have a medical examination. If a firm’s promotion includes product features or benefits, these must be presented in a fair, clear, and non-misleading way taking into account the target audience.

In November 2012, the Association of British Insurers published ‘Initial Guidance on Over 50s plans)’ which providers of these plans may wish to refer to when designing their promotions.

We (the Financial Conduct Authority) expect all promotions to be fair, clear and not misleading in line with COBS 4.2.1R and PRIN 7.

The Association of British Insurers published similar guideance many years earlier onthe subkect of over 50s life cover:

Misleading Financial Promotion for Over 50s Life Cover

The financial promotions team have seen promotions for Life Policies for the over-50s where we believe consumers could be misled into thinking they are buying a policy that will cover their funeral costs. Proceeds of these policies can be used for payment of, or towards, the cost of a funeral. However, it is important that, if a firm’s promotion refers to funerals and associated costs, consumers are not misled into believing they are buying a funeral plan that will cover their funeral costs in full.

Over-50s Life policies are widely promoted through various media channels, including television advertisements. They guarantee to provide Life Cover for the over-50s without the need for customers to have a medical examination. If a firm’s promotion includes product features or benefits, these must be presented in a fair, clear, and non-misleading way taking into account the target audience.