Term assurance - repaid mortgage - if invalid can I get refund?

Tighthead

No worries. Have you tried calling them? Who is the original insurer/current insurer and product name?

scottyh56

I have not called because, from experience, rarely do you find anyone who can respond accurately & I prefer to see this sort of thing in writing.....

It was a Zurich Life policy, "Term Assurance" "Mortgage Securuty Assurance", there is no mention of a mortgage guarantee. I think I've already mentioned all the relevant wording above (policy documents must have been briefer in 1988!)

The policy is now with Windsor Life.

I have a quasi legal background and my reading of the policy is that if they go by the letter of what it says then they would not have to pay so in the absence of anything in writing from them (again see their first letter above) then my wife & kids are relying on their goodwill....

Tighthead

Good luck getting anything in writing from Windsor Life this side of Christmas! Awful company.

I have never seen a company refuse to pay a claim because there is no mortgage left. I think you must be missing some of the paperwork or have overlooked some of the T&Cs. Can you scan and post a link to the document? I'd be interested in looking.

dunstonh

Zurich have never sold any business (that I am aware of) to Windsor life. Are you sure you didnt change provider at some point in the life of the plan?

The insurer will not refuse claim because of no mortgage.

Tighthead

dunstonh wrote: »

Zurich have never sold any business (that I am aware of) to Windsor life.quote]

That's what I was thinking. Didn't Swiss Re buy WL, and merge with Zurich Re? That's the only link I can think of.

http://www.swissre.com/pws/business%20services/admin%20re/policyholder%20queries/policyholder%20queries.html

scottyh56

It's one page. The Schedule (from Zurich Life) says:

"The Mortgage to which this policy refers is a mortgage effected by the Life Assured and is repayable by level instalments of principal and interest."

"The Death Benefit .... is payable on the death of the Life Assured .... and will be the amount of The Mortgage outstanding at the date of death."

I have now found a letter from Zurich Life to my solicitor from 1995 which deals with the 1995 v. 1988 issue. The terms that I'm quoting here date from 1995. But I have had a different mortgage since 2001. The Mortgage balance referred to is nil.

When asked in 1995 Zurich confirmed the policy was in 'full force'. Windsor Life last year said "the amount assured decreases in line with the mortgage that the policy was originally taken out with providing no changes have been made to that mortgage".

From what you say about Windsor Life I think I should be worried!

Thanks for sticking with this, but perhaps we should wait for a reply rather than speculate further. If it comes before Christmas I'll post it here.

dunstonh

That's what I was thinking. Didn't Swiss Re buy WL, and merge with Zurich Re? That's the only link I can think of.

http://www.swissre.com/pws/business%...20queries.html

I wouldnt be surprised if Swiss-Re reassure the Zurich policies as they do in part or in full with most providers. I dont think they bought any of Zurich's book.

I'm still confused over the change in company from Zurich to Windsor.

When asked in 1995 Zurich confirmed the policy was in 'full force'. Windsor Life last year said "the amount assured decreases in line with the mortgage that the policy was originally taken out with providing no changes have been made to that mortgage".

That is correct. It will pay off the mortgage providing no changes have been made. As there is no mortgage now, it cannot pay if off. Instead it would pay to your estate.

From what you say about Windsor Life I think I should be worried!

Not worried. They are just a pain in the neck of admin.

grogdog

but as you have already mentioned you are going to cancel the plan so it doesnt matter what would be paid out.

but if you phone the company they should be able to tell you what would be paid out if you were to die now, if they cant tell you over the phone they will post it to you.

lisyloo

but as you have already mentioned you are going to cancel the plan so it doesnt matter what would be paid out

I think what scoty is saying is that if it is directly linked to the value of the mortgage and pays out zero, then potentially it's worthless and premiums should be refunded.
So the main question is

1) Is it directly linked to the mortgage or does it jsut pay out the notional value of a repyaament mortgage at that time.

Second question is

2) If it is a valueless policy and has been for some time then are they entitled to refunds bearing in mind the insurer would not have known about the mortgage.

I suspect they don't have much hope but in their posisiton I'd want to know too.

scottyh56

Ah! Lisyloo you are right on track.

Having constuctively informed them about my changed circumstances last year and them replying in such guarded terms have they knowingly been taking my money for nothing?

Just to reiterate, if one takes the policy wording at face value then I have no doubt they would not have to pay anything. There's no mention of notional mortgages, just The Mortgage that has a zero balance. And is that not the way most insurance companies behave?