An excerpt from groups.google.com

As you can see, I teach Life Insurance courses. If you have any questionsabout Life or Health Insurance, I will be happy to answer them as best I can.

In 1981 when I was young and foolish (I'm older now), I becameself-employed and bought the Paul Revere LTD and London LifeInsurance policies recommended by a London Life agent in Toronto.

I cancelled the LTD policy about eighteen months after I had tostop working. Paul Revere had paid benefits for nine months, thenstopped without notice or explanation, ignored repeated requestsfrom myself and my doctor for information, took a $300 lump sum frommy account (4 months of premiums) without notification, etc.Paul revere LTD insurance merits a separate discussion.

My current decision concerns the London Life (Canada) whole lifepolicy. This cost about $540/year for $25,000 coverage, and thedividends / paid up additions were supposed to carry the policy afternine years ("vanishing premiums"). The agent stressed the "buyingversus renting" analogy.

In 1990, after nine years, I had about $3,000 cash value, about$7,000 paid-up additions, dividends were about $250/year, andpremiums were still $540.

I told London Life to apply the dividends against the premium, andmake up the balance from cash value (I confused the source of cash;it actually comes from surrendering paid-up additions previouslypurchased with the dividends, aka "premium offset"). I estimatedthat the policy would carry itself for at least ten years.

In 1995, (after five years), I received a letter stating that thepaid-up additions would no longer cover the premiums.

I wrote the Toronto office and asked them to provide, in writing,the annual premium, dividend applied, and amount of cash balance(should have been paid-up addition) used for each year since 1990.

I waited one month, then sent a copy of my request to the headoffice. I received a letter stating that they'd look into it.

The most recent correspondence I have received from the Torontobranch states that I owe about $13 to cover the balance of thepremium due. They have not provided the numbers for 1990 - 1995,nor explained my options at this point.

It appears that London Life ignored my written instructions toapply dividends against the annual premium, and continued to purchaseadditional insurance while paying the full premium by cashing inolder paid-up additions.

Intuitively, it seems that applying the current dividend againstthe current premium before cashing in existing paid-up additions topay the balance would have been better for me. Is this correct ?Why would London Life choose to do the former ?

My current premiums are $521 and cash value is $4761. I believethe 1995 dividend was about $250 (which they used to buy paid-upadditions which they subsequently cashed in to partially pay thepremium). I'm inclined to walk away from the whole mess - I hateshabby business practices. I realize that London Life maximizesprofit by cancelling a policy before its owner dies, but IMO theyhave some obligation to deal in good faith.

I have another whole life policy with Canada Life. They have beenapplying the dividends towards premiums for years - I usually payless than half the total. I had considered implementing thisarrangement with London Life once the cash value (should have beenpaid-up additions) were exhausted.

Any comments or advice are appreciated. I don't need lifeinsurance at this point in time, however I have 'invested' in'this policy and don't want to cash it in without considering myoptions. Unfortunately, London Life has not provided the dataI need to make an informed decision.