An elderly Havelock North couple feel "scammed" after their life insurance premiums are set to almost double, despite signing a contract for life more than 30 years ago.

Hilton and Trish Kyle took out a life insurance policy with AMP in November 1988, with a monthly payment of $165.90.

But Hilton, 69, said they received a letter stating failure to pay a missed payment would see their policy cancelled.

The letter also stated that their premiums will increase to $296.50 per month.

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The Havelock North pair say the letter was "completely out of the blue" and the company have no right to increase their payments.

"They are taking advantage of us. It makes us feel terrible," he said.

"We've had an automated payment set up with ANZ for the 32 years.

"We were gobsmacked to be treated like this from AMP. These buggers need to be exposed."

Hilton Kyle was left feeling
Hilton Kyle was left feeling "scammed" after his 32-year-old $165.90 per month insurance policy premiums were almost doubled. Photo / Warren Buckland

An AMP Life spokeswoman apologies for any distress the letter may have caused the Kyle's and said an automated mail system caused the issue.

"We have investigated this issue and it appears to be a mistake driven from an automated letter," she said.

"The instructions given in the letter have been revoked and we have also reached out to the customer directly."

AMP Life encourages any policy holder to make contact with the company if they have questions relating to their policy.

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The Elliot Cres residents say they've paid more than $60,000 in premiums between them since they first set up the policy.

"We're elderly now. We're living off a pension and are dependent on that," Hilton said.
"It feels like we're being scammed as they can't explain why they're raising the premiums."

Hilton added: "It's just not right – it's criminal."

Smith and Partner senior solicitor Nathan Tetzlaff said this contractual issue will depend on the exact wording of their original policy.

"When getting insurance it's important to ensure that the policy wording actually matches what you are being told about the policy," he said.

The lawyer said the couple should request full information about the decision and why it is being made.

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"There will generally be an internal process to request information and dispute the company's decision. If this does not result in a satisfactory outcome a complaint could be made to Insurance and Financial Services Ombudsman."

Tetzlaff added that there is a "duty of good faith" implied in most insurance contracts, however.

The couple, who have until September 5 to pay their outstanding premium charge before policy cancellation, say they would stay with AMP if the premiums were reverted back to their original monthly totals.