Mortgage Payment Protection Insurance

dunstonh

I have only just found out that that mortgage protection, critical illness, life cover cover are actually all PPIs

Are you saying that you dont have CI, life assurance and mortgage protection (life) but you have multiple PPI plans?

Or are you saying that you think that all insurance is called PPI? (which it isnt)

Do you know if the same rules apply as they do with credit cards and loans?

No. In the vast majority of cases, life, CI and MPPI are sold under an advice process where full details are known about you, a needs analysis completed and a recommendation report issued and kept on file. Loan and credit card PPI has been so easy to claim on because they havent had the same level of audit trail.

Bought them at Barclays bank when we took out the mortgage,

So, under an advice process where they would have known all about you (mortgage application for example covers the bulk of it)

,but they are actually through some other major companies that have regulary misold policies.

What companies? Most insurance companies have not mis-sold policies for many years. Most for over decade as they ended their own salesforces. It is also irrelevant as you bought through Barclays.

. If they are, why not let me know, i am sure that they have mis-sold it if they are the same.

Let you know what?

PPI is supposed to be a good product, yet i cannot understand why banks mi-sell them.

You appear to be making assumptions based on incorrect information. Better to look at your own case and not those of others in totally unrelated circumstances.

Look at what you have and if there was a financial need for it at point of sale (i.e. if you or your husband died, would you need the mortgage cleared - i.e loss of income on death, inability to repay the mortgage). If you have a financial need then its not a mis-sale as far as the product goes.

southend

Hiya, thanks for replying so quickly,

we have one life insurance each, mortgage protection, critical illness etc - all seperate insurances, sold to us through Barlays Bank when we got our mortgage. One being a mortgage decreasing term assurance from Legal and General, but the man at Barclays sold it to us. Barclays is who i was referring to - misselling PPI, not insurance, sorry, shattered.

I read somewhere that these were also PPIs and we have just resolved a mis-sold ploicy by them ( loan). The idea of PPIs are supposed to be good, the implemtation of them is another. Maybe it is this lack of trust with our bank, due to PPI and some other things we have had to sort out, not our mistakes, theirs. We are not on the band wagon to get out of.. or ...etc.

This has put doubt in our minds and to be honest has caused some worry. We need to know that we will be protected if my husband lost his job, or if anything went drastically wrong etc. Therefore, we do have a need, as we could not afford to pay our mortgage etc otherwise.

I am also trying to work out what the best type of cover is, more secure ie less get out clauses etc. He was too vague at Barclays . We are also worried if any info we provided ie not enough sick days for my husband for that year is to the day.

Something is bugging me about it all, we were not offered income protection, when i questioned it at a later date, their answer was " it would cost you about £100.00 (month) and the gentleman was probably trying to save you money, but you should be okay with these policies, refused to check them for us, just a general chat all but ten mins max.

Could you advise us, or know of any good policies to look at who are reputable. It makes it harder as i have health issues and life insurance/assurance costs more. Is it moe secure to have seperate policies for each thing, surely it costs more? I don't know alot about insurance at all, the terminology etc. We are not wealthy, but we do ok, but like everyone we want what it says on the tin so to speak

Not sure if it would have been better to have an insurance company come directly to us. I don't know if we pay Barclays a fee (assume we do), if so hope it is a one off.

Thanks for helping me, i feel stupid.

dunstonh

I read somewhere that these were also PPIs and we have just resolved a mis-sold ploicy by them ( loan).

Wherever you read that is wrong. PPI stands for payment protection insurance. Life assurance, decreasing term assurance (also known as mortgage protection) and critical illness plans are not payment protection insurances.

The idea of PPIs are supposed to be good, the implemtation of them is another.

That is correct and why so many loan and credit card PPI sales are now under scrutiny. However, MPPI (mortgage payment proection insurance), is typically sold under the process that stops those sorts of complaints.

Something is bugging me about it all, we were not offered income protection, when i questioned it at a later date, their answer was " it would cost you about £100.00 (month) and the gentleman was probably trying to save you money, but you should be okay with these policies, refused to check them for us, just a general chat all but ten mins max.

Income protection, or permanent health insurance to give it the generic name, is expensive compared to MPPI. Clerical jobs with clean health applications (no illnesses) can be well priced but manual jobs and where there are medical conditions can start to see the price rocket.

Could you advise us, or know of any good policies to look at who are reputable. It makes it harder as i have health issues and life insurance/assurance costs more. Is it moe secure to have seperate policies for each thing, surely it costs more? I don't know alot about insurance at all, the terminology etc. We are not wealthy, but we do ok, but like everyone we want what it says on the tin so to speak

That isnt something anyone can do on the internet as there is no one best option for everyone.

Not sure if it would have been better to have an insurance company come directly to us. I don't know if we pay Barclays a fee (assume we do), if so hope it is a one off.

Ask a local IFA to come out and see you. No point using a sales rep from an insurance company (which is what Barclays are). The IFA will be better priced and have whole of market access.

southend

dunstonh wrote: »

Wherever you read that is wrong. PPI stands for payment protection insurance. Life assurance, decreasing term assurance (also known as mortgage protection) and critical illness plans are not payment protection insurances.



That is correct and why so many loan and credit card PPI sales are now under scrutiny. However, MPPI (mortgage payment proection insurance), is typically sold under the process that stops those sorts of complaints.



Income protection, or permanent health insurance to give it the generic name, is expensive compared to MPPI. Clerical jobs with clean health applications (no illnesses) can be well priced but manual jobs and where there are medical conditions can start to see the price rocket.



That isnt something anyone can do on the internet as there is no one best option for everyone.



Ask a local IFA to come out and see you. No point using a sales rep from an insurance company (which is what Barclays are). The IFA will be better priced and have whole of market access.

You have really put my mind at ease especially the fact that doubt was put in to my mind. With what you said i believe that you are right especially due to some past complaints and some health problems today - but i am not seriously ill. I don't think mine will pay up now due to the different ways that you and bank have said. You know your stuff, they were too vague.

I now believe that we need an IFA to come to see us. We did think that the bank was providing financial advisers, regarding this matter. We don't understand all these different products and i don't think age etc will benefit us, esp since we both smoke ( don't tell me off, please). Concerned an IFA will be very expensive though, esp when we are already paying more £120.00 a month for the products that we have, but need it to pay off our mortgage if we die and/or cover the bills or mortgage if illness occurs.

Can you advise us about any t&c that we should avoid in any product, sorry i have never used an IFA before, not questioning you. I think whast i am treying to say is
Do we actually pay the IFA and he/she looks after our best interest, or do they ring fence so many insurance companies ( who ever the IFA think is best ) and is paid by both parties?

What is the best stratergy to get a decent IFA, is it the company ie a brand name so to speak?

I know i am asking stupid questions and not really explaining it right ( in a bit of a tiz waz ).

THANK YOU SO MUCH

dunstonh

I now believe that we need an IFA to come to see us. We did think that the bank was providing financial advisers, regarding this matter. We don't understand all these different products and i don't think age etc will benefit us, esp since we both smoke ( don't tell me off, please). Concerned an IFA will be very expensive though, esp when we are already paying more £120.00 a month for the products that we have, but need it to pay off our mortgage if we die and/or cover the bills or mortgage if illness occurs.

The IFA can work on fee basis or commission basis. On commission basis (like the bank was) they will still be cheaper than the bank.

Can you advise us about any t&c that we should avoid in any product, sorry i have never used an IFA before, not questioning you. I think whast i am treying to say is
Do we actually pay the IFA and he/she looks after our best interest, or do they ring fence so many insurance companies ( who ever the IFA think is best ) and is paid by both parties?

Bank sales reps represent their employer. IFAs represent the client. You can get to see all the research and you can ask questions on why xyz was chosen.

What is the best stratergy to get a decent IFA, is it the company ie a brand name so to speak?

The majority of IFAs are small local firms. Statistically, you are not likely to get a bad one. Every profession has bad apples but its worth noting that despite IFAs handling the majority or advice transactions, they account for under 2% of complaints at the FOS (unlike banks which only do a minority of transactions but have the majority of complaints).

southend

dunstonh wrote: »

The IFA can work on fee basis or commission basis. On commission basis (like the bank was) they will still be cheaper than the bank.


Bank sales reps represent their employer. IFAs represent the client. You can get to see all the research and you can ask questions on why xyz was chosen.


The majority of IFAs are small local firms. Statistically, you are not likely to get a bad one. Every profession has bad apples but its worth noting that despite IFAs handling the majority or advice transactions, they account for under 2% of complaints at the FOS (unlike banks which only do a minority of transactions but have the majority of complaints).

You are truly an angel, i feel safe now,the only thing is:

Would we be better to pay fees upfront instead of commision?

Would an IFA alone be better than an IFA Broker if that makes sense?

Should we be looking to see if they are part of some association/body?

Qualifications?

Is there anything in particular that we should be looking for whilst choosing one?



In a way i am glad we were mis-sold our PPI, we did not even think we had at the time- they told us. This made us question everything else and if we ever needed one of our present policies we have i am unsure they would of paid up therefore, wasting money

ITS PEOPLE LIKE YOU IN THE WORLD THAT MAKE OTHERS FEEL THAT SOCIETY HAS NOT COMPLETLY LOST IT'S WAY, THANK YOU

southend

dunstonh wrote: »

The IFA can work on fee basis or commission basis. On commission basis (like the bank was) they will still be cheaper than the bank.


Bank sales reps represent their employer. IFAs represent the client. You can get to see all the research and you can ask questions on why xyz was chosen.


The majority of IFAs are small local firms. Statistically, you are not likely to get a bad one. Every profession has bad apples but its worth noting that despite IFAs handling the majority or advice transactions, they account for under 2% of complaints at the FOS (unlike banks which only do a minority of transactions but have the majority of complaints).

Just got off the phone from my wonderful husband (doing night shift) he said to say thank you from him as well. It has made him really think now. Any way, got to get some sleep, have to be up to get the kids ready for school. We are really thinking together and logically about this thanks to you.

Make sure that you get some sleep too.

dunstonh

Would we be better to pay fees upfront instead of commision?

In the long term a fee would be cheaper given your premium levels. However, you may ask them to agree a fee but have the commission pay it with any surplus being used to reduce the premiums or any shortfall made up by you. Its unlikely you would have a shortfall.

Would an IFA alone be better than an IFA Broker if that makes sense?

There is no such thing as an IFA broker. The term broker is a little mis-used. Historically because of insurance brokers in the high street. Most of whom were also IFAs. With regulation as it is today, its just an IFA that you need to see.

Should we be looking to see if they are part of some association/body?

Qualifications?

Is there anything in particular that we should be looking for whilst choosing one?

To be an IFA you have to be authorised by the FSA and be at a required qualification level. You could enquire of the IFA what they are doing post 2012. The qualifications are going up to a higher level then and many older and less skilled advisers are dropping down to become mortgage and protection advisers (which wont require the higher level). If you want to build a long term relationship with a local adviser then its worth making sure they are going to be there post 2012.

You can also ask the IFA to take a more detailed look at the sale of your existing plans. Once they see exactly what you have and any paperwork you have with it they will be in a better position to see if you have any grounds for complaint or not. Its a little hard on the forums when you dont have the full detail.

southend

dunstonh wrote: »

In the long term a fee would be cheaper given your premium levels. However, you may ask them to agree a fee but have the commission pay it with any surplus being used to reduce the premiums or any shortfall made up by you. Its unlikely you would have a shortfall.



There is no such thing as an IFA broker. The term broker is a little mis-used. Historically because of insurance brokers in the high street. Most of whom were also IFAs. With regulation as it is today, its just an IFA that you need to see.


To be an IFA you have to be authorised by the FSA and be at a required qualification level. You could enquire of the IFA what they are doing post 2012. The qualifications are going up to a higher level then and many older and less skilled advisers are dropping down to become mortgage and protection advisers (which wont require the higher level). If you want to build a long term relationship with a local adviser then its worth making sure they are going to be there post 2012.

You can also ask the IFA to take a more detailed look at the sale of your existing plans. Once they see exactly what you have and any paperwork you have with it they will be in a better position to see if you have any grounds for complaint or not. Its a little hard on the forums when you dont have the full detail.

You have now got me wondering about changes post 2012. When i get an IFA and he later decides to stop doing business where do we stand financially etc?
I ask this, just in case we have to pay by commission and say he/she stops trading say 2013, we will surely owe him money. In this situation do you think he can request of of this money or even take us to court for it?

dunstonh

You have now got me wondering about changes post 2012. When i get an IFA and he later decides to stop doing business where do we stand financially etc?

It wont have any impact on your recommendations. Remember the IFA recommends the product and providers. They will continue post retirement or whatever that IFA decides to do if they decide not to continue post 2012. However, as I said, ask the IFA if they plan to go on beyond 2012 and go with one that does. Remember the IFA isnt providing the actual insurance. They are just finding out who is best, what you need etc and then putting that in place for you. It could be aviva, Friends provident, Scottish Widows or many others. However, once set up, it doesnt matter if you never use that IFA again or not.

I ask this, just in case we have to pay by commission and say he/she stops trading say 2013, we will surely owe him money. In this situation do you think he can request of of this money or even take us to court for it?

Commission is the same method as you paid the bank. If he does stop trading then he cant come after you for money as he would no longer be authorised. Remember with commission, you are not paying the commission. The product provider is. You pay the premiums to the insurance and out of those the product proivder pays the commission.