What are penny policies and how can I track one down?
It’s estimated that there could be millions of pounds worth of unclaimed penny policy benefits. Could you be one of the beneficiaries? Here’s how to find a life insurance policy.
It’s estimated that there could be millions of pounds worth of unclaimed penny policy benefits. Could you be one of the beneficiaries? Here’s how to find a life insurance policy.
What are penny policies?
Penny policies were life insurance, savings and endowment policies. These were sold door-to-door between the 1920s and the 1960s – although some were still being sold as late as the 1990s.
As the name suggests, premiums cost just a few pennies and could be used to cover funeral costs, or for savings or endowments that paid out on maturity.
Although it may seem odd now, parents could take out a policy for their children that would pay out on their death, to help with expenses.
The premiums for these old insurance policies, also known as industrial branch policies, were collected in person and records were kept on paper. Once insurance providers stopped going door to door, it was easy to lose track, especially if the customer moved away, fell ill or died.
For that reason, many penny policies are still unclaimed. Since these policies cost relatively little and were taken out long ago, it’s likely that many people have forgotten they have them. Or, if it was a policy taken out by parents for their child, they might not even know it exists.
Could I have unclaimed penny policies?
It’s possible you took out a policy several decades ago and forgot about it. Or your parents or grandparents may have taken out a policy for you, which you might not know about. You may even find an old paper policy that your parents forgot about, when the time comes to sort through their things.
There could be millions of unclaimed penny policies still waiting to be redeemed.
LV=, or the Liverpool Victoria Friendly Society, as it was known back then, had 1.1 million unclaimed penny policies on its books alone when it started a campaign to reunite policyholders with their payouts in 2018. At the time, hundreds of thousands more policies were estimated to be unclaimed from providers like Royal London and Prudential.
How to find an old life insurance policy
Perhaps you have a sneaking suspicion that you or a family member took out a policy several decades ago and forgot about it. Perhaps you even remember the insurance man calling round when you were little?
- If you know which company issued the policy, contact them directly.
- If you don’t know who issued the policy, check your financial documents and see if you can find any relevant information. Penny policy records were often kept in a small receipt booklet, which recorded weekly payments, so keep a look out for these.
- You can try using Gretel, a fairly new platform that lets you search for lost or dormant assets like life insurance policies, pensions, bank accounts and investments. It’s free. But their database is by no means exhaustive, so there’s no guarantee they’ll have your penny policy on file.
- You can also contact the Association of British Insurers, which has contact details for life insurance providers.
- The Association of Financial Mutuals can give you contact details for mutual insurance providers and friendly societies. You can then get in touch to see if you have an account with any of them.
Which insurance providers issued penny policies?
A number of providers issued penny policies. But many of these no longer exist under their original names. These include:
- The Liverpool Victoria Friendly Society, which is now called LV=. The company launched a campaign in 2018 to reconnect policyholders with their Liverpool Victoria life insurance old policies – find out more at LV Reconnect.
- United Friendly, Refuge Assurance and Royal Liver life insurance have all rebranded to become Royal London. If you think you might have a policy from one of these providers, contact Royal London.
- Prudential is now responsible for several companies that issued penny policies. It has a web page dedicated to getting in touch about old Prudential life insurance policies. They can help you by performing a Prudential policy number search, if you have yours to hand.
- Britannic Assurance, Swiss Life and Pearl Assurance old policies are now owned by Phoenix Life. All three firms issued industrial branch policies. If you think you have one lying unclaimed, check their website for details of how to trace it.
- Aviva also sold a small number of penny policies. If you get a letter from them about an unclaimed policy, find out how to get in touch.
How much are penny policies worth?
Given that the premiums paid for these policies were literally pennies, you may well be wondering – are old insurance policies worth anything? As with most questions in life, there’s no clearcut answer.
How much penny policies are worth depends on various factors, including the type of policy, when it matures and how long premiums were paid for.
For example, if you, or the policyholder, kept up with premium payments until the policy was ‘paid up’, interest might have been building up since the policy matured. If compound interest has been building for decades, you could see a substantial return on the original investment.
However, if the premiums stopped before the set term and the policy ‘lapsed’, then you may not get more than the original surrender value – the cash amount offered to the policyholder should they cancel the policy. The payout from a forgotten penny policy isn’t likely to be life-changing. But even if you think the amount involved might be fairly insignificant, it’s still worth checking out – you might be pleasantly surprised.
How do I cash in a penny policy?
If you’re cashing in an old life insurance policy, contact the insurance provider the policy is with and give them any details you can. They can tell you if the policy is still valid and how much it’s worth.
You may need to provide a copy of the policy and possibly a death certificate if it’s in the name of a relative who has died.
What our expert says...
“One thing we can learn from penny policies is how surprisingly easy it can be to forget about life insurance policies, pensions and investments. Estimates vary, but it’s thought that there could be billions of pounds of unclaimed financial assets in the UK.
“To make sure your loved ones don’t lose out on money in the future, it’s wise to get your finances in order. If you do have a life insurance policy in place, keep your policy in a safe place and make sure that your beneficiaries know about it.”
- Tim Knighton, Life, health and income protection insurance expert
Frequently asked questions
What information will I need to provide if I’ve lost my policy?
Before you contact an insurance provider to ask if they have your old policy, it helps to have some information to hand. This may include your:
- Full name
- Date of birth
- Address history
- National Insurance number
- Policy number
- Payment method used
- ID (a driving licence or passport, for example).
What will I get for my penny policy?
This depends on many factors, including how long the premiums were paid and whether you received any bonuses. If you’ve recently found a penny policy you’d forgotten about, it’s worth getting in touch with the provider to see what it’s worth.
If the value seems wrong to you, ask the insurance provider to explain how they got to the calculation.
Can I still pay into a penny policy?
Although we tend to think of penny policies as a relic of the past, there might still be some active penny policies out there.
It’s unlikely that you’ll find any new penny policies on the market, though.
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Tim Knighton - Life, health and income protection insurance expert
For over 20 years, Tim’s been building and managing relationships with big brands for the benefit of customers. As our expert on all things life, health and income protection, he’s working hard to find the right products that look after you and those you love most.
Rebecca Goodman - personal finance expert
Rebecca Goodman is a freelance financial journalist who specialises in insurance, personal finance and consumer affairs. Rebecca regularly writes for national newspapers including The Independent and The Mail on Sunday on a wide-range of financial topics. She covers everything from money-saving tips and holiday advice to investigations into how energy efficient appliances can cut the cost of household bills and the impact donating money can have on those in need. Along with features in national papers, Rebecca also writes news stories for websites including Yourmoney.com and The Money Edit.