mis-sold life ins.

shaz1000

About 10 years ago my husband and I were sold a life policy by an advisor working for our local Bradford & Bingley . We were told that it would pay a guaranteed min of £70,000 on first death. The monthly premium is £23.00. Now we have been told that the prem we will need to pay to keep this level will be £58. On investigation we found that we have been sold a whole of life policy and not a level term policy. This is now being investigated by B& B who say that they are inendated with simular complaints. It appears that the advisor no longer works for them and they are unable to trace her. My husband has taken out a new life policy of £100,000 for only £28.00 a month. I on the other hand now have health problems which I did not have 10 years ago and have been refused ins. As you can imagine we are furious about this and wondered if anyone else has had simular experiences and what compensation we may get if this can be proved.

dunstonh

You will get no compensation as such. If complaint is upheld, you will get a correction made.

In this case, if upheld, you would expect the insurer to put you on a term assurance under the original terms (so no new underwriting). Any difference in premiums would be refunded and maybe interest. If the term assurance premiums were higher, they wouldnt ask you to pay the back payments but if you wanted to keep the revised plan going, you would be expected to pay the higher premium.

shaz1000

Thanks for your reply DD. I think term !!!!!!. is usually cheaper. I am hoping that because they have had lots of other complaints of this nature, that it will help our case.

dunstonh

Thanks for your reply DD. I think term !!!!!!. is usually cheaper. I am hoping that because they have had lots of other complaints of this nature, that it will help our case.

Its not necessarily cheaper. Depending on the term of the plan and what growth rate was used for the whole of life it may have been cheaper on the whole of life.

They have probably got a lot of complaints because they have written out to increase premiums. The two things tend to go hand in hand. The documentation at the time will be reviewed as the advisor has vanished. One assumes that she isnt an advisor any more as the FSA keep a log of current and past advisors so even if she moved on, they would be able to find her.

Dont assume that because they have had a lot of complaints, that the complaint will automatically get upheld. The FSA doesnt award complaints on poor performance and the increase is due to poor performance. However, if you were not aware of the investment linking, that is the key route your complaint should follow.

shaz1000

Our complaint is that she told us that the premium would stay the same throughout and as we took it out at the same time as our mortgage we needed cover for at least the length of our mortgage, which as she knew was 25 years. She told us that that premium would payout a guaranteed min of £70,000 on 1st death. There was no mention of a review after 10 years. :'(

dunstonh

Our complaint is that she told us that the premium would stay the same throughout and as we took it out at the same time as our mortgage we needed cover for at least the length of our mortgage, which as she knew was 25 years. She told us that that premium would  payout a guaranteed min of £70,000 on 1st death. There was no mention of a review after 10 years.  

Most tied company policies were reviewable after 5 or 10 years.   Especially those from the banks. Its usually in the what risks part of the key features document.    So 50/50 on that one as to what they will consider there.

Next thing is that you took it out to cover a mortgage.   A tied advisor has to recommend the best product for you in their range so as long as the whole of life plan isnt the only thing they offered and a decreasing term assurance (assuming repayment mortgage) was available, you have a much stronger case on that.  

Rather than increase the premiums on the existing plan, were you given the option to lower the sum assured but keep the same premium.  If the mortgage value has decreased, the revised sum assured may still be adequate.   I'm making some assumptions on the type of mortgage but i'm thinking of your insurability problem.  It may not have been offered but altering the sum assured is usually available on request.

shaz1000

The reduced cover for the same premium is only £7,000 i.e. p*** poor, when you consider that my husband is now covered for £100,000 for £5 more per month. No other options were given to us . She said she had searched all the options and she considered this the best for us. I know we were nieve, but you know how stressful it is buying a property and we also had a 10 month old baby (our first) to worry about. I was also suffering from post natal depression, which didn't help.