Column: Roger's Soapbox

I Thank Myself

By: | December 10, 2014

Roger Crombie is a United Kingdom-based columnist for Risk & Insurance®. He can be reached at [email protected]

If I live another few weeks, a life insurance policy taken out when I was 24 years old will mature. The term of the policy was 41 years. The annual premium was £50 (about 80 bucks), before tax relief. I opted for a with-profits policy.

This was the final policy in a ladder that I started, at my father’s suggestion, at the age of 22.

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The idea was to take out every year a new 10-year policy, starting the 11th when the 10th matured, and so on until decrepitude set in.

Two things defeated that idea: the bookkeeping required and my leaving Britain, which made the whole concept less tax-efficient.

Fifty pounds was worth a great deal more in 1974 than it is today. It was then almost 2 percent of my annual net pay; today it barely buys lunch.

Through thick and thin I never missed a premium — not much of a boast at £50 a year.

The original goal was to be able to buy a Morris Mini Cooper with the proceeds when the policy matured. I had hoped to receive about £10,000, thanks to the wonders of compound interest and wise investment management.

Through thick and thin I never missed a premium — not much of a boast at £50 a year.

The check I imagined receiving will be instead a bank transfer, unthinkable in 1974 for the common man, for something over £14 grand.

Don’t bother writing begging letters; the proceeds were spent some time ago.

Not on a Mini, however. I had several Minis in the late 1960s and ’70s. The floor fell out of the first on a freeway, at high speed; another caught fire; a third was stolen. The idea of shooting for a new Mini was therefore ambitious back then.

The Mini is now made by BMW, and the one I want, if I wanted one (which I don’t), would cost north of £30,000.

I failed to claim 15 percent tax relief by living most of the policy’s 41 years in Bermuda, where there is an effective 100 percent tax relief on everything, since there are no taxes on unearned income. Net, I invested about £2,000. My money has septupled. Few men live long enough to write the preceding sentence.

A few years ago, the policy was on track to yield £20,000, but the seemingly permanent ban on interest earnings instituted by the economic terrorists Alan Greenspan and Ben Bernanke put the kibosh on that.

By setting money aside, even such a ludicrously small amount, I shall soon be rich beyond my tamest dreams.

Do not, however, interpret these comments as dissatisfaction. By setting money aside, even such a ludicrously small amount, I shall soon be rich beyond my tamest dreams.

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I was, however, disappointed by my insurer’s refusal to allow me to prepay the last few years’ premiums, which greatly increased the chances of my forgetting and the policy therefore lapsing.

I was also not allowed to increase the amount of the premium. Neither decision helped me, nor can I see how either helped the company.

The life cover was £1,000, but that never entered into my thinking. As a callow youth, I always planned to become a callow old man, and have succeeded magnificently in that regard.

The policy proceeds are a gift from all the “Me”s that ever there were to the “Me” who needs them most. Thank you, “Me”s.

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