You don't have to be as old as I am to remember the advertising slogan "get the strength of the insurance companies around you." That ad campaign and the images it conjured up of dry, pallid people sitting in brown, dusty offices counting money and doing endless little calculations in huge ancient ledgers persisted well into the nineteen eighties. The accompanying image of an insurance policy rolled and folded to look like a castle keep protecting a happy family of carefree parents and their two point four children also reeked of prudence and probity. Surely these people could be trusted to protect us from the consequences should we ever be foolish enough to abandon conformity and try to think for ourselves.
I'm sure it was once all true and valid but somewhere along the line, probably soon after Maggie Thatcher deregulated money and stock markets the insurance companies changed and their moralistic advertising was revealed as a hypocritical sham. Your money would have been safer if you had shunned the Financial Market invested in the 2:30 at Newmarket.
Chances are if you had invested in a with profits endowment policy with any of the leading providers any time in the last twenty years you would be looking at a loss. Ms Dwenna Georges knows we speak true for she did just that and is now out of pocket.
We heard of Ms Georges' plight some months ago and blogged it on Little Nicky Machiavelli.
Let's get this straight, the case is not that the lady will not get back anything like the sum she was led to believe the policy would return but that she will not even get back what she has paid in. On paper the loss is only £298 which if you say it quickly sounds like peanuts on a £60,000 investment but when we allow for inflation over a decade it is really quite substantial.
Since then the financial system has collapsed thanks to the greed and stupidity of those who controlled the markets and the complicity of the politicians who gave in without resistance to the please for more freedom for the market makers, less regulation. Always the promise was tat is the banks were getting rich we were all getting rich. It was not true of course, the banks were getting rich by persuading us to plunge ourselves into debt by borrowing at very real interests rates from the pool of monolpoly money they had created through artificially and unrealistically inflating the value of property.
Had Ms. Georges put her cash, £500 per month in a fuddy-duddy old Post Office savings account at two and a half per cent interest, the kind of investment that was derided by the brave new financial advisors of Maggie's Brave New World she would now be looking, according to my very quick calculation at a lump sum of £68,900 rather than £59,700. And yet the insurance company involved has traded for years on its reputation for honesty and prudence, not to mention some intriguing ads featuring the rather attractive daughter of 007 Roger Moore, effing hell why am I being coy, its Scottish Widows although the excuses and citation of vague clauses in the very small print offered by its smarmy spokesman might sound more typical of the Mutual And Friendly Insurance Association. "Investors should be aware that their investments can go down as well as up," or "cashing in a policy can often lead to getting back less than has been paid in," the usual bullshit. The thing is Ms Georges thought she was buying a ten year policy, the sales literature which she still has talks of a ten year policy yet she signed up for a twenty year policy. It was a worse deal for her but a better one for the salesman.
Scottish Widows, like Norwich Union, Prudential and most of the others would like us to believe that we are all to stupid to understand money so we should not forget the endowment mortgage scandal and the pensions scandal. While these thieving scum are advertising their "ethical trading policies" they are simultaneously encouraging sales people to go out and LIE to the punters. Why? Little Nicky, having been a victim of legalised insurance fraud himself in a previous incarnation, will tell you why. Because if government and regulators made them tell the truth about their "financial products" we would all be bunging our money in Post Office Savings accounts (which pay considerably more than two and a half percent these days.
Let's remember folks that while it was Maggie's neo-cons who deregulated the fraud industry, the People's Party have had nine years to change things but have only piled fuel on the fire.