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Experience with Life Insurance Maturities

From a policyholder, words relating their experience of collecting maturity proceeds: 

The maturity of old-style endowment life insurance policies should provide an opportunity for a life insurance company to acknowledge what is usually a decades long customer relationship and to leverage customer goodwill for the company and the industry.

How about the actual experience?

First up, is the legislative provision requiring fulfillment of AML identification at maturity, if not completed earlier – not necessarily the best start but outside of the company’s control.Beyond that, here are two examples of what happened. In both cases, all required documents, well before maturity date, were completed and provided to the respective insurance companies, AMP and Foundation Life (the latter being the purchaser of Tower’s life business).

In the case of AMP, matters progressed as follows:

4 March 2019 – My AMP online shows the maturity as having been initiated but un-allocated.

31 May 2019 – The maturity date came and went.

10 June 2019 or thereabouts – Travelling overseas, sent an inquiry via the AMP online contact website seeking advice on why the maturity proceeds had not been paid.

12 June 2019 – Received an e-mail advising that maturity proceeds had been paid into my bank account, with an apology for the delay, stated to arise “due to unexpected staff absences.”

13 June 2019 – Via e-mail, I acknowledged receipt of the funds, even while noting that the benefit of the delay will have accrued to AMP and that, without seeking compensation, no financial compensation was offered to be paid for the delay to offset the time value of money lost.

19 June 2019 – On arrival home from overseas travel, I found a letter from AMP dated 4 June 2019 advising me that AMP had not received my instructions for maturity so were holding the funds until receiving the completed settlement form (which you will note was completed before the start of the timeline above).

Then to Foundation Life.

1 May 2019 – Letters received from Foundation Life regarding the maturity of three policies

7 May 2019 – All required documents completed and returned to Foundation Life and, as requested, a phone call is subsequently received confirming that all requirements have been met.

24 July 2019 – Maturity date and maturity proceeds received into my bank account, but direct debits also completed removing two small unusual and, relative to premiums, unidentifiable amounts from my bank account. The maturity proceeds for two the policies are also less than expected, the differences matching perfectly the amounts direct debited from my bank account. I telephone Foundation Life to query the direct debits and short paid maturities, and I am told to expect an answer in a few days after investigation.

30 July 2019 – Foundation Life phone me and apologise for the direct debits, which should not have occurred and advise me that a letter will follow explaining each maturity payment amount, which is correct. I question why, if the direct debits should not have occurred, and the maturity payments received should have included a refund for the incorrect direct debit amounts, how come the maturity payments are less, not more, than originally advised. The Foundation Life staff member says, “You are right”, and said that it will be investigated further before responding again to me.

5 August 2019 – The shortfall in maturity payment and a refund of the direct debits are credited to my bank account.

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