Widows are being threatened with legal action from some of
Rules for conventional annuities say that any remaining pot cannot be passed to survivors on death; payments stop as soon as an insurer is informed. But there is evidence that some firms are taking a heavy-handed approach to recovering money paid out in the period between someone's death and the cancellation of the policy.
Solicitors say the bereaved are often traumatised by providers insisting payouts made after a death are returned immediately. "This happens a lot, with providers issuing inappropriate letters," says
"You'd expect more compassion if the amount is small," says
The situation doesn't seem to have changed for the better since one reader's husband passed away in 1995. "When my husband died, less than five years after retirement, I reported his death," she says. "In reply the company said that because the payment was made in advance, I had to return the last month's. I recognised that they were legally entitled to it, although I thought it rather mean - they were going to make significant profit from his early death." A few days later she received a letter threatening legal action if she didn't return the money immediately. "I made the payment later, and my accompanying letter made it quite clear what I thought of their callous treatment of a widow."
Another reader told Cash: "When my father died, my mother received similar letters from his annuity providers. One insurer demanded the return of the last payment and threatened to take legal action when she didn't promptly respond."
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