mis sold life assurance

jo51

Has any one felt they were mis sold life assurances. Myself and my husband arranged life assurances expecting them to expire on death, but have found out that the within the print of the statement suggested we accepted life assurances until the age of 70, then it may be extended. (The agent asked us questions filling in the documents and got us to sign them, not showing us what had exactly what he had written). We have been paying into these policies for over 15 years and had never received a statement stating that the policy would expire just prior to our 70th birthday, or thata they were temporary policies (until this year). On not being able to find our original copies of the the contracts I asked for a copy, only to find the documents filled in by the agent mentions an amount of years for the policies to run which at the time added to our then present ages did total 70 years of age.

I feel that we have been mis sold policies, and do not wish to accept the company to take 15 years of premiums so far and do nothing, as they have not provided us with what we resquested.

Does anyone know who I contact or what I do next.

Thank you

Annisele

I think you'll have an uphill struggle to make a complaint on that basis. You might win, but the fact that you appear to have signed something showing that the policies will only run to 70 will count against you.

Were you given any annual statements/other documents over the last fifteen years? If so, it's probably worth digging them out and seeing if the term was mentioned on those documents. If it was, it weakens your case - but if they suggest that the policies were 'whole of life' that might strengthen your case.

If the terms and conditions say that the policies "may" be extended, have you asked for an extension? What did the insurer say?

If you do decide that you wish to make a complaint, you will need to complain to the company that sold them to you. If you're not sure who that is, make the complaint to your insurance company - if they aren't responsible, they will pass it on.

dunstonh

Has any one felt they were mis sold life assurances.

Its pretty hard to be mis-sold life assurance. Its relatively straightforward and if you have a financial need then claiming you shouldnt have it is hard.

Myself and my husband arranged life assurances expecting them to expire on death, but have found out that the within the print of the statement suggested we accepted life assurances until the age of 70, then it may be extended.

So, it doesnt sound like you have a standard term assurance as they expire at the end of the term and cant be extended. It doesnt sound like you have a whole of life assurance as they go on for the whole of your life. It sounds like you have a renewable term assurance but they are not very common nowadays.

We have been paying into these policies for over 15 years and had never received a statement stating that the policy would expire just prior to our 70th birthday

You dont get statements on pure term assurance as there is nothing to pay you. You only get them on plans that obtain value.

I feel that we have been mis sold policies, and do not wish to accept the company to take 15 years of premiums so far and do nothing, as they have not provided us with what we resquested.

You have a couple of issues here.

1 - do you have a whole of life need? - its wrong to be sold a whole of life plan when you dont have a whole of life need. Most people only have a term need so you would expect a term assurance.

2 - what evidence do you have that you wanted a whole of life assurance? - probably none which wont work for you

3 - if it is a pure term assurance then regulation from 15 years ago was very light (still is today really). So, unless you have evidence that shows a whole of life need you are unlikely to get anywhere on a complaint.

jo51

I note all the comments in response to the post I made on the 24h April and thank you for them.

I have had another look at the paperwork and have found statements for the first 13 years of the policies and none of the statements say that they are temporary policies, but within the headings of the statements say 'yearly renewable'. None of the statements mention that the policy is only guarenteed to the age of 70, (until the most recent statement). None of the statements say that there is a value other than a death benefit value.

I know that I will probably have a battle our my hands, because I do not think that the insurance company will want to return any premiums or guarantee life assurance for 'whole of life' without cancelling the policies and starting a new policies.

Thank you for any comments given.

Annisele

Even if the policies were mis-sold (and I'm not convinced of that) you wouldn't necessarily receive compensation. It's probably worth thinking about what you want to achieve before you start a "battle".

In the (in my view unlikely) event that your complaint is upheld on the basis that you should have been sold whole of life cover, then the appropriate redress would probably be to put you in the position you would have been in if you had taken out WOL cover to start with. The redress calculation would probably cover two points [edit: three]:

1. Were the premiums you actually paid in the past higher or lower than the premiums you would have paid had you taken out a WOL policy from outset? WOL is generally more expensive than renewable term policies, so chances are that each month for the last fifteen years you've actually been paying less than you otherwise would have done - and that would be taken into account.
2. How much will WOL premiums cost you in the future, compared with what you would have had to pay had you taken a WOL policy from outset? (This one will depend very much on your current state of health).

[Edit to add a third point: the surrender value of the hypothetical WoL policy would also be taken into account. However, if you assume that the hypothetical WoL policy was taken out on a 'maximum cover' basis (low initial premiums, high liklihood that premiums will increase) the hypothetical surrender value would probably be low/zero. If you assume that the hypothetical WoL policy was taken on a 'standard cover' basis, the historical premiums would have been quite a bit higher than your yearly renewable term policy, but there probably would be a surrender value to take into account).]

Do you actually need whole of life assurance now? If so, why? To succeed in your complaint, I think that you'd have to show that you needed WoL (rather than term assurance) fifteen years ago, and that you could have afforded the WoL premiums.

jo51

In response to your post/reply, what we really want is piece of mind that the surviving partner is financially secure even at the age of 70 plus. We now have a child and we want financial security for them too.

We also feel why would we take out life assurance until the age of 70, why not until the end of life?

Thank you again for further comments.

dunstonh

We also feel why would we take out life assurance until the age of 70, why not until the end of life?

Do you have a whole of life financial need? Most people don't. So, what makes you different?

A policy sold under advice has to meet the financial need. A whole of life assurance sold when there isnt a whole of life need would be a mis-sale.

Also, a whole of life assurance is more expensive than a term assurance. So, either you would have needed to pay more or accept a lower payout on death.

I know that I will probably have a battle our my hands, because I do not think that the insurance company will want to return any premiums or guarantee life assurance for 'whole of life' without cancelling the policies and starting a new policies.

The battle isnt because of that. If you want to void the policy and replace it with a whole of life assurance then they would actually get more money out of you as it would have been more expensive. The battle will be because you are unlikely to be able to prove that you had a whole of life need and wont be able to persuade them that the policy was mis-sold.

jo51

I am a little lost, so I will clarify a couple of things.

My self and my husband have a criticalillness/life assurance to cover our mortgage, and the seperate life assurance was to leave the surviving partner financially secure for life, and then when anything happened to the survivor then our child would be financially set for life.

I do not try to be different, but do not understand why I should not have financial security for members of my family in the event of death regardless of age.

Why do I feel that I am being got at ?

May I just point out that we still have over 20years to go until we are 70, and the premiums increase on the assurance policy, as the assurance pay out increases also, so god knows how much we will be paying in the end.

Annisele

Sorry, not trying to get at you - just trying to show you how the insurance company might look at a potential complaint.

As dunstonh says, not everybody has a WOL need. Since WOL is generally more expensive than term assurance, advisers shouldn't sell WOL when term assurance is what's needed. Also, most people have finite amounts of money to spend on their protection needs. If, say, for each £10 of premium you could buy £100k of term assurance or £25k of WOL cover, for most people it would be more sensible to spend that money on term assurance rather than WOL. For some people, it's better not to take life assurance at all and spend their protection budget on critical illness/PHI/other stuff. (Those figures are completely made up; exactly how much more expensive WOL would be than term assurance depends on all sorts of factors).

Some reasons for people needing term assurance rather than WOL (not an exhaustive list):

• They have a mortgage (or other debt) over a fixed term, and they want their debt covered on their death. (Sounds like you already have cover for this).
• They have children, and they want to ensure that the living standard of their children doesn't suffer after their death. Usually this need is only until the child is aged 18 (or 21) - broadly until you expect the child to be financially self-sufficient.
• They are earning an income, and they want their surviving spouse to be able to replace that income on their death. Historically people were often sold cover of ten times their salary for this purpose (although in a period of low interest rates that wouldn't necessarily cut it). However, that need usually ceases before retirement - because the earning spouse will have stopped earning anyway, just due to retirement rather than death.

WoL may be appropriate as part of an inheritance tax mitigation arrangement. There are other uses for it, but in my view they're pretty niche.

[Edit: Should have added - if you're concerned that you now have insufficient life cover/cover over an insufficient term, it might be worthwhile finding yourself a decent IFA and discussing your concerns with him. He can help you review the cover you've actually got, and discuss whether that's what you need. If it isn't, he can help you find the right product).

lisyloo

I do not try to be different, but do not understand why I should not have financial security for members of my family in the event of death regardless of age.

Why do I feel that I am being got at ?

HI jo,

I don't think your being got at.
I'm not as knwoledgeable as the others, but most people's needs would be to cover themselves whilst they have a mortgage and have children or any other financial liabilities.
Once you get past retirement, most people would have no mortgage, no kids and no big financial liabilities. Most would have a pension to live on until they die and some of those pensions provide for a dependent.
So most people would not need life assurance past retirement.

Whether you are different or not. the problem you face is that if you signed to say you "read and understand" the policy and they have the correct documentation, then you can see that puts you in a difficult posistion.

I do understand your posistion as I've been their myself.
I have an endowment that quotes 6%, 9% adn 12% returns on paper but the advisro told me to ignore the paperwork as 22% was reasonable.
So I do understand where you have been told somthing different to what is in writing,.
However the facts are that unless you have audio recordings from 15 years ago, then the arguments will be based around the paperwork you signed and I'm afriad you have to accept that.

dunstonh

Why do I feel that I am being got at ?

You are not. Don't worry about that. However, as mentioned by the others above, we are looking at it as a complaint would. The adviser has a responsibility to recommend a plan that matches your financial need. You say you want a whole of life assurance but there is no indication that you have a whole of life need.

So, if you are putting in a complaint about being mis-sold a term assurance and not a whole of life plan then you need to show that you have a whole of life need. Otherwise you havent been mis-sold.

The other point is that whole of life plans cost more each month than term assurance.

If the adviser recommended a whole of life plan costing more than a term assurance where there is no financial need for a whole of life plan then that would be a mis-sale. You are effectively claiming the opposite.

May I just point out that we still have over 20years to go until we are 70, and the premiums increase on the assurance policy, as the assurance pay out increases also, so god knows how much we will be paying in the end.

You should get a local IFA to come out and see you. Partly to explain the differences in the types of life assurance available and to cost up a replacement level term assurance and whole of life assurance plan. That way you will have a better understanding of the costs and benefits.

Also, I am trying to think of companies that did yearly renewable term assurances and the only two I can immediately think of are Pearl and Synergy. It's unlikely to be synergy as they tend to market more towards they quote comparison sites. Pearl didnt have a proper level term assurance and their whole of life plan was really more geared and priced towards funeral expenses (it would have been about 8 times the monthly cost of the term assurance). Who is the insurance company?