Equitable Life Policy Holders Get Back Less Than 25% Of Losses

Policy holders of Equitable Life are still reeling from David Cameron’s announcement that they would only be receiving back a mere quarter of of the money they have lost.

Both Conservative and Liberal Democrats used compensation for the company’s policyholders as an election platform. Many are accusing Cameron of falsely raising hopes of over a million policy holders, telling them that he would sort out issues with Equitable Life.

A spokesperson for the Equitable Life Action Group, Paul Weir, stated that Cameron only pledged to get back the policyholder’s money to win votes and knew that there would never be enough capital to pay out on the promise. Weir stated it wasn’t as though Cameron suddenly discovered that there wasn’t enough money. He said the final result was not what people had voted for in May. In the end, he only ended up limiting payments on the same level the last government did. Weir stated that the next election would be demonstrative of what voters think of the compensation package.

Last week, the Treasury announced that 945,000 people who had with-profits policies would only be receiving 22.4 percent of their loss. The blow came especially hard to younger people, who will have to wait approximately three years to see their payments begin. The decided figure was similar to one that was previously set by a judge, which was part of the Labour Government’s review. The conservatives heavily criticized this.

The government also announced that roughly 37,000 annuity policyholders would be fully compensated for their losses and receive regular payments for the rest of their lives. However, there is a large percentage of people that have died before they could receive any compensation at all.

Mark Hoban, who is a Treasury minister, stated that the estates of the deceased would be the first to receive compensation, followed by the elderly. Younger people will have to wait until approximately 2014 to see any payments, with no interest.

This entry was posted on January 29, 2011 at 7:56 am and is filed under Life Insurance. You can follow any responses to this entry through the RSS 2.0 feed.