Investment policy costs still too high

Insurance companies are still selling investment-based mortgages and pensions where the costs are far higher than official recommendations, the Volkskrant reports on Wednesday.

The financial services sector ombudsman says the cost on a policy offering an annual return of 4% should not exceed 2.5% of the total premium. But, the Volkskrant says, DSB Bank, Delta Lloyd, RVS, Aegon, Rabobank, Fortis and Avero Achmea all offer policies with higher costs.
At the beginning of March, the ombudsman said insurance companies should refund a total of €2bn to customers who put money into investment-based schemes because not enough of their contributions was actually invested.
Some 6.5 million policies have been sold but in some cases only 60 cents of every euro in premium has been put into stocks and shares.
The insurance association said the 2.5% limit could not be applied to the current product range. ‘We are not allowed to make deals over prices,’ director Richard Weurling told the paper. Transparency about the costs was the most important thing, he said.

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