Could this happen to your Life Insurance - How is it legal!!

[Lifepolicytransfer]

On 23rd February 2025 Canada Life protection policies sold before 1st January 2023 will be transferred to a company called Countrywide Assured plc, a company that doesn’t sell any policies but buys them…

”...we don’t sell products to you or new customers, rather we take over existing policies from other companies to manage them as efficiently and robustly as we can...” Countrywide Assured website

Policyholders have no choice:

“The legal process we are following does not require us to obtain consent of individual policyholders in order to implement the transfer” - Canada Life Customer Guide regarding transfer, published June 2024.

Most of us taking out Life Insurance have 3 main considerations:

The reputation of the company providing the life cover.

The premium being paid, once accepted.

But ABOVE ALL else:

The percentage of claims paid out when claims have been made:

For example on the Aviva or Vitality website you will see the percentage proudly displayed 99.3% and 99.7% respectively for the year 2023. This inspires confidence when purchasing a policy. There is a reason these numbers are marketed so prominently on insurance company websites, it is not an accident.

Canada Life website shows 100% of death claims paid out over the past 11 years.

This percentage does not exist for Countrywide Assured.

Tesco Life branded policies (actually provided by Direct Line) have already been transferred to Countrywide Assured in 2014. Has nobody passed since to determine a percentage?

No disrespect to previous Tesco (branded) Life policyholders (we shop there ourselves), but the decision to take out a Tesco branded policy, one assumes, would be based on the brand recognition of Tesco and there’s nothing wrong in that. Also having this reputation, you may have felt extra security that in the event of a claim (wrongly) being denied the reputation of the biggest supermarket in the country may work in your favour for reconsideration, again nothing wrong with that. This is the sole reason for insurance companies branding their policies with household / highstreet names. In addition the percentage of claims paid out by Direct Line (provider of Tesco Life policies) would no doubt have been visible at the time of purchase. All good then….but what about those reassurances (implied or otherwise) now, under Countrywide Assured?

Canada Life, more than most companies, would be a considered choice, usually on advice from a financial adviser, or for those of us with mild financial knowledge using the above three criteria, these aren’t rebranded policies.

The Customer Guide states the Independent Expert (just one mind) has reviewed the transfer:

“I have considered and analysed the effects and the impact of the Scheme on all of the policyholders of Canada Life and Countrywide, including the Transferring Policies.

“In my opinion, the implementation of the Scheme will not have any material adverse effect on any of the following:
-The reasonable benefit expectations of the policyholders of Canada Life and
-The security of the benefits of the policyholders of Canada Life and Countrywide.
-The levels of administration and customer service, management and governance that apply to the policyholders of Canada Life and Countrywide.”

Really how so….?

How did the Independent Expert come to these conclusions considering:

Death benefits paid out by Canada Life - 100% over 11 years, Countrywide Assured claims paid out ??
Defaqto Star Rating when our policies were taken out Canada Life - 5 Stars, Countrywide Assured ??
Trustpilot rating Canada Life - 4 stars, Trustpilot Rating Countrywide Assured - 1.5 Stars
Fitch Long term Insurer Financial Strength Rating Canada Life - AA (Very High) Outlook - Stable
Fitch Long term Insurer Financial Strength Rating Countrywide Assured A ( High) Outlook - Negative
Remember Countrywide Assured doesn’t sell policies they “...manage them as efficiently and robustly as we can..”
Therefore it is fair to assume that the overall Trustpilot Rating of 1.5 Stars (made up of 89% 1 star ratings!!) is predominately of those seeking to claim. Other than changing your address there are very few reasons to contact your life provider once the policy is in place.
Would it not have been prudent for the “Independent Expert” to have availed himself of the percentage of death claims paid, since the purchase of other life policies by Countrywide Assured?
Your options:

You can raise an objection with Canada Life, although those of us who have, received standard word responses, guiding us to the wisdom of the Independent Expert. Understandably the offer to appear in the High Court to press these issues is daunting and not without risk in our humble opinion. It is also not made clear whether there are any legal implications for us appearing in person. Nor do we want a blackmark against our policies which we are already concerned about.

You can carry on paying your premiums and hope your family receives a payout when you pass, based on information above.

You can cancel your policy and take out a new one with another company, this will undoubtedly cost more as you will be older. Also depending on your current health it may cost significantly more or you may be denied cover altogether. If you do this, get the new policy in place, before cancelling.

Remember this hasn’t happened because Canada Life is financially troubled, it isn’t, they have traded policyholders as a commodity one assumes to the highest bidder. Had the reputation of the company they had chosen been of a similar standard or higher, there would be few complaints. For example AIG was purchased by Aviva, if you had a Life policy with AIG one assumes being with Aviva would be of little concern.

But what Canada Life has done here is truly disgusting. We didn’t seek out a company with a decent customer care reputation, pay higher premiums for one paying out a higher claims % than others; to than be transferred to Countrywide Assured, with no choice, no past performance and most importantly no record of what % of claims they honour. Who in their right mind would have voluntarily purchased (if it were possible) or chosen for Countrywide to manage their policy based on publicly available information. The exact same infomation one would use if purchasing a policy from another company, no more no less.

We can only hope somebody with a high profile (MP, Financial Services Regulation Committee, Treasury Sub-Committee on Financial Services Regulation, Finance Committee (Lords / Commons), Financial Journalist) will take this up and raise objections in the High Court.

There is major consolidation in the life insurance market and it is ongoing. Customers who took out policies in good faith, having done their research, shouldn’t have these expensive protection products traded with disdain. Especially when they were purchased for the benefit of surviving family members.

Please share far and wide.
Please help put a stop to this transfer.
Thank you.

References:
Typing the phrase below into google will take you to the official website detailing the transfer.
“canada life transfer to countrywide”

Of course it’s legal. Books of insurance business get bought and sold all the time. My DH is in this industry. All your policy terms apply just the same under the new ownership, so if you have a valid claim within the parameters of the policy wording it will be paid.

As per @VanCleefArpels standard practise and very common to sell on your book, particularly if you are not taking on new business.

You’re completely misunderstanding a few key points and getting in a tizz over nothing:

1. the trust pilot reviews you’re referring to are for countrywide property services, a different company offering a different service
2. insurance is a regulated industry, if you have been honest on your declarations and stuck to the policy terms they will be forced to pay out by the regulator in the unlikely event of a dispute, their general operations will also be governed by the regulator to ensure proper standards and being upheld
3. this is common with insurance (and other financial products) and will have been in the T&Cs, it’s not really a material change as the impact on you will be pretty much nil - you’ll pay the same premiums and be entitled to the same policy terms

Happens all the time with pensions too

The insurance business is highly regulated. Your policy hasn’t changed and any decision to pay out or not is based on the legal effect of the policy wording, which a judge can rule on if necessary.

Books of business change hands all the time. It’s nothing to get worked up about.

Cross posted with everyone else!

I don’t understand what your problem is?

^The reputation of the company providing the life cover.
The premium being paid, once accepted.
But ABOVE ALL else:
The percentage of claims paid out when claims have been made^

Almost no-one will have considered that last point. In any case, life insurance is one of the least disputed types of insurance there is, because there is little argument about whether or not someone is dead.

In the tiny minority of claims not paid, it will usually be for something like an undeclared condition or suicide when this is a policy exclusion.

As long as the terms of the policy remain the same, which they almost certainly will, you have nothing to worry about. Companies undergo changes in ownership and branding all the time, and in any case, 'famous names' and Trustpilot reviews are rarely an objective measure of reliability.

This really is normal in Life Assurance. You take out a policy for a really long time (often 30 years or more) and companies change in that time.

As a pp said, so long as you were honest when taking out the policy and meet the conditions, they will absolutely still pay out. People are really suspicious of insurance companies, but that's because most people's main experience is with car and house insurance, which have so much customer fraud that they have to be careful of how they pay out.

It's much harder to make a fraudulent Life Insurace claim! They will check that your claim is valid and that you didn't lie about any medical conditions when you took out the policy - but they actually do genuinely want to pay legitimate claims.

The reason to choose one Life company over another is the quality of their products - eg what conditions are covered - compared to the price, and how they calculate the extra risk of any pre-existing conditions you have. Ie how good value it is. But that's all done when you take the policy out. By the time the other company take your policy over, that's all set in stone.

Then why doesn't Countrywide publish the percentage of claims paid out since their takeover of Tesco (Directline) policies if they match the numbers as before there is no issue.

It's not the fact that the policies have been sold but who they have been sold to, nobody would care if they were sold to Aviva .

I love the matter of fact attitude. It would imply that today if you had 3 quotes from 3 different inurance compnaies with similar strength ratings, you would actually pick the one with the worst customer service and one for whom you had no claims data for..... wow!

That customer service will be experienced by your loved ones, not you.

Absolute disgrace!

You might want to take a step back and breathe, otherwise your family are going to be the first claim statistic that Countrywide publish!

It really really doesn’t change the likelihood of your policy being paid out.

I admire your confidence in thinking that payment of claims data is the most important criteria considered on purchase of a life insurance policy. I’d bet most of all I own that this is rarely if ever a factor (outside of your household obvs!) more important than price.

This is a very normal feature in the regulated insurance industry and each sale/purchase takes well over a year to jump through the necessary hoops, which include several court appearances along the way.

"set in stone"

You fundamentally mis-undertand the insurance market. You need to look at the statistics where claims are refused for trivial reasons, knowing full well that they wouldn't stand up to scrutiny by FOS. The claims department will now fall under Countywide Assured and the prevailing culture of that company.

The choice as a customer has been removed and not becuase Canada Life is in financial trouble, it isn't.

Why would you blindly assume such a thing, it's beyond naive. Just beacue they can do it doesn't make it right. We should have a right to move to another more reputable provider and any increase in premium (age/health) should be covered by Canada Life.

No, you’re fundamentally misunderstanding the insurance market. If the denial of the claim wouldn’t stand up to FOS then it will be overturned and your loved ones will be in the same situation as they would have been before I.e. insurance pays out. It costs a company a significant amount for a claim to investigated by FOS, whether it’s upheld or not, so companies have no interest in denying valid claims on a whim as it’s time consuming and expensive.

It would imply that today if you had 3 quotes from 3 different inurance compnaies with similar strength ratings, you would actually pick the one with the worst customer service and one for whom you had no claims data for..... wow!

I’d choose the cheapest one that suited my needs the best, which is the sensible decision.

Do you want to share the source of your “statistics where claims are refused for trivial reasons”? These will be claims on life insurance only, of course?

as a canada life customer i had no idea of this. shambles

I look forward to seeing your statistics OP! I do rather think you have got yourself in an uninformed flap about something incredibly normal that has happened in a highly regulated sector with built in protections for policy holders.

It is set in stone. Your policy is contractual. It won't change.

I can assure you that I do understand the Life Insurance market.

Life insurance companies really don't refuse claims on a whim. If you've been honest in disclosing previous conditions, and you have a claim event which is covered by the terms of the policy you bought, they will pay out.

Canada Life have fulfilled their obligation to you by getting Countrywide Assured to take over your policy under the terms you bought it.

One of my old policies has been moved around to different insurers no less than FOUR times. It isn't exactly uncommon for this sort of thing to happen.

get life insurance with a company with decent customer service & then stop paying with the old policy which had been taken over

This is terrible advice, unless you bought your Canada Life policy very recently and have no new medical conditions to disclose.

At least get quotes before you cancel your policy, and compare the terms carefully.

When you take out a policy, you are set an unchanging premium for the whole term of the policy, which may be for several decades (possibly with annual percentage increases/decreases). It's not like medical insurance, where they increase your premiums each year. Life Insurance commits to continuing to insure you for that same premium during the whole term. Since your risk of dying increases with age, they average out your risk over the whole term of the policy. So your premiums are higher than your risk requires at the start of your policy, and lower than your risk requires at the end of your policy. Over the whole term, it averages out.

If you take a new policy at a later age, your premiums will almost certainly be higher, because the insurer haven't had the benefit of getting those premiums all through your younger, healthier years.

There are some products which have lower premiums at the start of the term to reflect that (still all specified up front) but it's less usual.

You will also have to declare any new medical conditions, which may mean your risk is higher (and hence increase your premiums, or add exclusions)

(If you declared a condition when you took out your Canada Life policy, but now haven't experienced that condition for many years, that condition might no longer be taken into account - but it's unlikely to be more significant than your older age)

Like another poster, I've an old life insurance policy where we've actually lost track of how many times it has changed provider due to take over / sell-off etc. It's an old-fashioned with-benefits policy so has some investment value as well (rather limited though). My mother was cross when my sister and I turned 21 as she was sure we had a right to double the cover for only double the premium, but the relevant paperwork couldn't be found and the then responsible company just responded as if we had two heads.

Currently I think I'm going to assign its benefit to my children rather than try to sell it as a boost towards retirement, as working out the tax position on sale would be insanely complicated (it's not a UK policy, and is over 50 years old having been taken out when I was a baby). It's not worth a huge amount but might help pay a bit of inheritance tax if necessary ...

As others have said I'm not entirely sure what the problem is OP, but you are of course within your rights to object by cancelling the policy and taking out another one elsewhere. This would likely be more expensive so I'm not recommending it, but it would remove what seems to be a very high level of anxiety on your part.
Do be prepared that you will probably have the same situation arise in the future though.

Your point about customer service doesn't even make sense as it has already been pointed out that you are looking at the wrong company on Trustpilot! The Countrywide with appalling feedback on that site is a completely different company.