Hundreds of Scots are facing financial uncertainty after Maiden Life Försäkrings abruptly announced the termination of its Family Protection Plan (FPP), a long-standing credit union life insurance policy.
The plan, in place since 1999 and withdrawn from sale in 2009, ended Nov. 30, leaving many policyholders without compensation despite decades of premium payments.
The move has sparked widespread anger among pensioners, credit unions, and political leaders, who have described the decision as “immoral”. Glasgow pensioners reported feeling robbed after paying into the scheme for 25 years or more, with some contributions exceeding the benefits they would have received.
According to a report from STVFP News, the FPP was distributed through broker CMutual and local credit unions, and many credit unions had integrated premiums into members’ regular savings plans.
One credit union in Lanarkshire had invested over £1.3 million of clients’ funds into the scheme. John Lyons, manager of the Carntyne and Riddrie Credit Union, said members had been left devastated, noting that most people had not considered withdrawing from the scheme after paying in so much, viewing their contributions as an investment and a way to avoid leaving a financial burden for their families.
Individual pensioners have expressed deep frustration. In the report, Mary O’Neill said she was horrified by the situation, adding that she and her family felt as though they had been robbed, and questioned where the money had gone. Anne McAulay noted that paying into the plan was intended to prevent leaving funeral costs to her children, and that discovering there would be no compensation was a huge shock. Many older members now feel abandoned and fear they will be unable to secure affordable cover elsewhere, according to the report.
Credit union managers have criticised the lack of transparency around termination terms. Stuart Boyd, of Dumbarton Credit Union, said that most staff were unaware of the policy’s 30-day cancellation clause and described the sudden termination as devastating. He added that the insurer had known for years that the scheme was unsustainable but had taken no steps to ensure its continuity.
Political figures have intervened, with MP Douglas McAllister and MSP Paul Sweeney raising concerns with the Financial Conduct Authority and government ministers. McAllister highlighted that some members had contributed over £10,000 across three decades and now risk being left entirely without cover.
Maiden Life said it had provided CMutual with considerable notice to allow members to seek alternatives and stressed that coverage had been in place throughout the years of contribution. CMutual confirmed it had been unable to find a replacement insurer on identical terms but is continuing to explore options to mitigate the impact.
The case underscores the vulnerability of long-term insurance arrangements when providers exit the market, raising questions about consumer protection, regulatory oversight, and the sustainability of term life and funeral insurance products for older policyholders.
