Why does Sir Michael Parkinscum do it?

Hopefully you have a busy and fulfilling life and never waste any of it watching daytime TV. But if you ever did see any daytime TV, you’d find yourself bombarded by ads like this one where Sir Michael Parkinscum CBE tries to flog you probably one of the worst insurance products you could ever buy:

Parkinscum’s ad appears between endless repeats and alongside a torrent of ads from ambulance-chasing lawyers and rip-off short-term loan sharks.

Parkinscum is, I assume, a rather wealthy man and at 80 years old hardly needs any more money. So why is he debasing himself by getting lonely, bored pensioners to part with their often meagre savings for poor-value insurance deals?

The product Parkyscum is flogging is an AXA Sun Life over-50s assurance plan whereby you pay in a certain amount every month until you die and in return get a fixed payout on death which it is suggested will help cover your funeral costs or maybe leave a little cash for your heirs.

There are several problems with Parkyscum’s little scheme:

1. Missed payments –  If you miss just one month’s payment between the time you start the policy till your death, you get absolutely nothing, zilch, zero – Axa Sun Life keep all your money. So, if you were hospitalised before your death and missed your last payment or if you went into a care home because of dementia and nobody kept up your payments – that’s it, all your money gone. Moreover, I believe the statistics which Axa Sun Life would have show that more than half the people taking out such policies abandon them and so lose all their money. Being a bright man, Parkyscum would know this. A cynic might unkindly suggest that being a greedy man, he wouldn’t give a toss

2. Inflation – the payout sum is fixed and not linked to inflation. So, if you paid in for say 25 years and inflation was running at the BoE target of just 2%, the final sum you receive would lose over 60% of its purchasing power – basically, it would be next to worthless and certainly wouldn’t pay for much beyond a small, damp bonfire to dispose of your mortal remains – so, no regal funeral for you

3. Poor value – with people living longer, most of the more than a million people in the scheme will pay in considerably more than they will get out. The longer you live, the more you pay, but your final payout on death is fixed at the start. The only people who might gain would be those who are in poor health, heavy smokers or obscenely obese and could die within ten to fifteen years of starting the thing

In one case cited during a recent investigation, an 84-year-old woman had a guaranteed payout of £2,738, but had already put in £3,727. And while she lived, she paid — £22 a month for the rest of her life, to fund a nest egg that could not grow and, in fact would lose value each year because of inflation. So, if she lived for another 10 years, she would end up paying in £6,367 but only get £2,738 on her death. Not a great return.

The heavy use of Parkyscum’s ad suggests his celebrity endorsement is paying off: more than 790,000  people have apparently signed up since his ad started running. Hopefully they’ll all be enjoying the free Parker pen they get just for enquiring as most of them will end up paying an awful lot for that ‘free’ pen

As money expert Martin Lewis warned, “He’s a lovely man, that Parky – just don’t listen to him when it comes to insurance”.

But, of course, the video I want you and everyone you know to watch is this one:

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