Life Assurance Policy

entwistle18

Hi There

I have recently moved house and increased my mortgage, so i needed to increase my life assuarnce cover, i did this by shopping around on moneysupermarket and found cover for the same price i was paying before i increased my mortgage. I went ahead and got the policy with Scottish Equitable and cancelled the old policy with Legal + General.

Yesterday i received a letter from 'complete move mortgages' stating i owe them nearly £200 because i had cancelled my policy because i had not been with them for 38 months. When i orginally setup my mortgage and Life Assurance with 'complete move mortgages' i was not made aware that if i did not stop with this company for over 3 years then i would be fined 1 /38th of the £400 arrangment fee

Is there anychance that i do not have to pay this money?

dunstonh

This sort of arrangement does exist and it is on the increase, with the consent of the regulator.

The onus is on the advising company to have a fee agreement in place, signed by you, confirming this "contract". If they have no fee agreement then you have little chance of getting the funds off you. If they do have a fee agreement, then you will have to pay or risk being taken to court.

I'm surprised Scot Eq came out best against L&G. Although their yearly renewable term assurance (a sub-standard product) often comes out cheapest until you realise that it is not like for like and increases in price every year. Unlike a level term assurance with guaranteed premiums, which will remain the same for the whole term.

Your Sunday tasks are:

1 - ask "complete move mortgages" for a copy of the fee agreement relating to this charge.

2 - check the Scot Eq policy is a level/decreasing term assurance and not a yearly renewable term/current costed life assurance.

entwistle18

Thanks for the advice.

Just to update you, i contacted complete move and talked to them very nicely and they have decided not to charge me, which is great :j

My new policy is reviewed after 5 years, and covers me and my partner for death and critical illness along with Permanente Disability. Is this a good type of policy, it costs £27 a month

Many thanks