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  • FIRST POST
    thriftyman1
    Mis sold critical illness cover
    • #1
    • 4th Aug 10, 9:06 PM
    Mis sold critical illness cover 4th Aug 10 at 9:06 PM
    Hi, Can anyone offer advice, in 2004 I bought a small house, when I bought it the estate agent got me to sign up to critical illness cover, I said that I did not need it, he pressurised me saying that if I did not sign up the estate agents would bill me over 500 for their services. I did not want to sign but it seemed better to pay 20 a month than 500 in one hit, I have just cancelled the policy after paying for 6 and a bit years. is there any way I can get this money back.

    thanks in advance.
Page 1
  • di3004
    • #2
    • 4th Aug 10, 9:08 PM
    • #2
    • 4th Aug 10, 9:08 PM
    Hi, Can anyone offer advice, in 2004 I bought a small house, when I bought it the estate agent got me to sign up to critical illness cover, I said that I did not need it, he pressurised me saying that if I did not sign up the estate agents would bill me over 500 for their services. I did not want to sign but it seemed better to pay 20 a month than 500 in one hit, I have just cancelled the policy after paying for 6 and a bit years. is there any way I can get this money back.

    thanks in advance.
    Originally posted by thriftyman1

    Hi and welcome

    I will leave this one for Dunstonh who will be along at some point to help you through this, good luck.
    The one and only "Dizzy Di"
  • dunstonh
    • #3
    • 4th Aug 10, 9:25 PM
    • #3
    • 4th Aug 10, 9:25 PM
    is there any way I can get this money back.
    Pretty unlikely.

    Unlike PPI, CI policies are sold under an advice process. They will have a factfind and needs analysis and you would have been issued a suitability report (or similar) and given cancellation rights before the first premium was paid.

    Unless you can provide evidence to support your claims it will be a pretty easy rejection for them as they will just say their records show you have a financial need and the recommendation matches the need.

    Whilst we all know estate agent advisers/reps have the worst reputation and you should never use them, unless you have proof, there is no reason for them to believe you.
    I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • Riskman
    • #4
    • 31st Dec 12, 3:06 PM
    • #4
    • 31st Dec 12, 3:06 PM
    Unlike PPI, CI policies are sold under an advice process. They will have a factfind and needs analysis and you would have been issued a suitability report (or similar) and given cancellation rights before the first premium was paid.
    What if they didn't ask the right questions, to establish if the need was already covered?

    When we took out our mortgage in 2002 my wife and I both had, and still have the following:
    Death-in-service benefit 3 x annual salary
    Widow/ers pension 50% spouse's salary
    6 months full pay sickness benefit extendable to 12 months (no exclusions for various conditions)
    Other life insurance.

    At the time we felt pressured into signing up for this CI cover because time was of the essence to complete the move. We weren't aware of the work-related benefits until much later. We cancelled the insurance in 2008.

    All of this would have been academic but for two things; the publicity over PPI reclaims and, in the process of having a clearout, my finding a letter from the insurance company notifying of a change of ownership of the company. These two factors have prompted me to think about making a claim.

    So, do I have a chance of getting some 4k of premiums back or not?

    Happy New Year to all.

    R
  • dunstonh
    • #5
    • 31st Dec 12, 4:29 PM
    • #5
    • 31st Dec 12, 4:29 PM
    What if they didn't ask the right questions, to establish if the need was already covered?
    What you define as the right questions?

    When we took out our mortgage in 2002 my wife and I both had, and still have the following:
    Death-in-service benefit 3 x annual salary
    Widow/ers pension 50% spouse's salary
    6 months full pay sickness benefit extendable to 12 months (no exclusions for various conditions)
    Other life insurance.
    None of those things overlap with CI cover. You typically find figures of around 10x income plus debts as the ideal figure to have for CI. Do you exceed that?

    At the time we felt pressured into signing up for this CI cover because time was of the essence to complete the move. We weren't aware of the work-related benefits until much later. We cancelled the insurance in 2008.
    You may or may not have been pressured. However, you cant prove it.

    All of this would have been academic but for two things; the publicity over PPI reclaims and, in the process of having a clearout, my finding a letter from the insurance company notifying of a change of ownership of the company. These two factors have prompted me to think about making a claim.
    Whilst PPI may have made you think about it, CI cover is not PPI and adivsed cases of PPI only account for 0.2% of complaints at the FOS and most are rejected. PPI is not an advised failing but a non-advised sales failing.

    So, do I have a chance of getting some 4k of premiums back or not?
    I would say not as you havent indicated any wrong doing and you do appear to have a financial need for it (the financial need thing being the key bit a that is now most advised complaints are viewed when there is no evidence of any wrongdoing).

    Also, you took it out 3 years before regulation started. If you used an IFA, estate agent or mortgage broker then chances are they dont even have to consider your complaint (as most didnt become regulated until 2005). A bank would have have to consider the complaint but as already said, you dont appear to have any grounds for complaint.
    I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • safestored4
    • #6
    • 31st Dec 12, 4:38 PM
    • #6
    • 31st Dec 12, 4:38 PM
    Even if they had asked the right questions would they have got the right answers from you to enable them to provide informed advice? By your own account you didn't know what workplace benefits you had until long after the event. The fact that you had life insurance is irrelevant to the question of Critical Illness cover. Life insurance pays out in the event of death, not illness. Looks like a case of mis-bought rather than mis-sold.
  • Moneyineptitude
    • #7
    • 31st Dec 12, 5:22 PM
    • #7
    • 31st Dec 12, 5:22 PM
    Life insurance pays out in the event of death, not illness. Looks like a case of mis-bought rather than mis-sold.
    Originally posted by safestored4
    I agree. The OP hasn't a valid complaint.
  • magpiecottage
    • #8
    • 1st Jan 13, 7:04 PM
    • #8
    • 1st Jan 13, 7:04 PM
    What if they didn't ask the right questions, to establish if the need was already covered?
    Originally posted by Riskman
    As DunstonH says, what do you think were the "right questions".

    When we took out our mortgage in 2002 my wife and I both had, and still have the following:
    Death-in-service benefit 3 x annual salary
    The "in service" bit means if you leave (or lose your job) you will get 3 zero - which is not very much.

    Widow/ers pension 50% spouse's salary
    50% of zero is exactly the same as 3 zero. It also will not pay off the loan.
    6 months full pay sickness benefit extendable to 12 months (no exclusions for various conditions)
    Actually I would probably have recommended Permanent Health Insurance with a 6 or 12 month waiting period in preference to CI in those circumstances but that does not mean the CI was unsuitable.

    Other life insurance.
    And it did not occur to you to tell the adviser?

    We weren't aware of the work-related benefits until much later.
    So in other words, even if what you consider to have been the "right" questions had been asked, you would have given the wrong answer. The adviser is not Chris Tarrant - he is not going to ask if it is the final answer or suggest you ask the audience.

    All of this would have been academic
    It is anyway. As DunstonH says, you took it out in 2002, which predates regulation - and this type of policy was not subject to the GISC code.
    Apparently telling somebody you are an IFA or mortgage adviser in your signature is not advertising and permitted. Telling somebody you are a compliance consultant and complaint investigator is advertising and not permitted - even if there is no indication of how to get in touch. So I am not going to tell you that I am!
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