Mis-sold Life Insurance Help

mikeyg_2

Hi all, first post so be gentle

I have a query about life insurance.

The nitty gritty is this: When my wife and I remortgaged in 1996, we took out an endowment policy to cover the cost of the additional sum we were borrowing. The original sum was covered by a separate policy elsewhere.

As far as we were aware, the policy was for myself only and the target amount was £8370. The premium was £42 / month. We felt it unnecessary fro my wife to be included as the other policy covers the bulk of our mortgage dept. [Incorrect information deleted]

At the time when we took out the top up policy, we were offered life cover for my wife, but to my knowledge [and my wife's] we declined.

It turns out that a policy was taken out for life cover only for my wife a cost of £10 / month. Note this is not an endowment and has no pay out value unless my wife dies. The £10 a month was added to the £32 and both amounts have been taken by a single direct debit for £42. An element of this premium also gives protection against critical illness, which again, to my knowledge, I neither wanted or accepted. It is unclear what proportion of the premium is taken for this 'cover'

I recently found all of this out when I requested a surrender value for the endowment policy. Having found out I requested copies of the relevant documentation. I now have the documents relating to my wife's life policy though there is apparently more comprehensive documentation which I should receive within the next ten days. It is the documentation which has clarified the above details. Admittedly I have received annual endowment statements on which the monthly premium is stated as £32 a month. I did not however notice the irregularity until now.

Curiously, when I enquired regarding my wife's life policy, it turns out that any documentation relating to this policy has been sent to our previous address, despite the endowment statements coming to the current address which we moved to very soon after the policy was instigated. I do have some documents sent to our previous address from the time, but as far as I was aware, it was only an offer of insurance, not contract documentation which we had accepted. It is entitled ' Level Term Assurance' Sub Heading 'Personal Illustration' and I having read the title, I probably did not read any further at the time. It does not bear our signatures.

The original endownment documents which I now have copies of are a shambles, in particular because of the fact that my details [as the first life assured] have been crossed out completely. They also have hand written addendums , in particular the details of the £10 a month life cover, which frankly could have been added at any time. Sadly, the document does bear both mine and my wife's signatures. But neither my wife or I recall the details being as they are listed.

Do we have any recourse? Is this misselling? Any help much appreciated


Mike

di3004

Hiya Mike and welcome.

I think Dunstonh will be better to help on this matter and will hopefully be along later sometime.

Good luck with this anyway.;)

mikeyg_2

Thanks for that di,

The plot thickens!

I've received more documentation this morning, which just confuses and annoys me even more.

The application form which I received last week [referred to above] was for my wife's life policy, which I thought was a bit strange because it also had my name on it and details of my endowment. Though my name and personal details were crossed out.

Well I've now received the original application for my endowment policy and guess what - apart from the cover sheet its an exact copy of my wife's application

but with this one her details are crossed out.

Surely if we had two separate policies they should have been processed on two separate applications and signed independently - not presented as a joint application and then photocopied and the unrequired details crossed out to suit.

My wife thinks that we originally agreed to a joint endowment policy, not the two separate policies. And the more information I get the more I think she is right.

Please help! I'm at a loss as to know what to do about this.

dunstonh

Surely if we had two separate policies they should have been processed on two separate applications and signed independently - not presented as a joint application and then photocopied and the unrequired details crossed out to suit.

No. What has been done would work.

This should be a fairly easy case to resolve. Unlike loan/credit card PPI there should be a full audit trail of the advice. This includes personal details, a needs analysis and a reasons why letter. It that doesnt exist then, unless its obvious why it was done, a complaint would likely rule in your favour.

Split endowments were not uncommon. especially for unmarried (at the time) couples where if you split up, you could take your own endowment with you.

mikeyg_2

Thanks very much for that dunstonh.

I'm thinking that the needs analysis and reasons why letter would have been totally seperate documents from the application yes? And if so that I should make a direct [written?]request for them as a next step?

Edit: Seems they have sent me a copy of a 'reasons why letter' for my wife's policy this morning, dated approximately 3 weeks before the signed application forms. It was however sent to our previous address which we may have allready moved from as we stayed with someone else for a while at the time. I need to investigate the exact dates though to be sure. I don't have the original letter as far as I'm aware.

dunstonh

I'm thinking that the needs analysis and reasons why letter would have been totally seperate documents from the application yes? And if so that I should make a direct [written?]request for them as a next step?

The needs analysis may not (and usually isnt) provided to you. The reasons why letter (or suitability report) as it is now would have been given to you. You can request a copy. If you are still in contact with the adviser and dont want to burn your bridges, then at this stage, requesting more info informally should be done. If you go straight to complaint (which you can do) you will probably end any future relationship with the adviser.

Edit: Seems they have sent me a copy of a 'reasons why letter' for my wife's policy this morning, dated approximately 3 weeks before the signed application forms. It was however sent to our previous address which we may have allready moved from as we stayed with someone else for a while at the time. I need to investigate the exact dates though to be sure. I don't have the original letter as far as I'm aware.

Pre-issuing the report is better than the required standard or issuing it post sale. This letter is the most important document as it should say why it was done, possible alternatives that may be equally as good or better and why they were not used and it should have the key risk warnings. The report is the key document in any complaint.

dunstonh

I'm thinking that the needs analysis and reasons why letter would have been totally seperate documents from the application yes? And if so that I should make a direct [written?]request for them as a next step?

The needs analysis may not (and usually isnt) provided to you. The reasons why letter (or suitability report) as it is now would have been given to you. You can request a copy. If you are still in contact with the adviser and dont want to burn your bridges, then at this stage, requesting more info informally should be done. If you go straight to complaint (which you can do) you will probably end any future relationship with the adviser.

Edit: Seems they have sent me a copy of a 'reasons why letter' for my wife's policy this morning, dated approximately 3 weeks before the signed application forms. It was however sent to our previous address which we may have allready moved from as we stayed with someone else for a while at the time. I need to investigate the exact dates though to be sure. I don't have the original letter as far as I'm aware.

Pre-issuing the report is better than the required standard or issuing it post sale. This letter is the most important document as it should say why it was done, possible alternatives that may be equally as good or better and why they were not used and it should have the key risk warnings. The report is the key document in any complaint.

mikeyg_2

dunstonh wrote: »

Pre-issuing the report is better than the required standard or issuing it post sale. This letter is the most important document as it should say why it was done, possible alternatives that may be equally as good or better and why they were not used and it should have the key risk warnings. The report is the key document in any complaint.

Thanks again for your time in answering this dunstonh

The letter says why the policy was recommended, though I feel the reason was/is not valid. It states that

"It was identified that on your death [meaning my wife] within the specified period, the financial security of your dependents [me only, no children at the time] would be at risk, as it would not be possible to generate sufficient income at that time from your existing arrangements. The sum assured recommended is designed to meet this shortfall".

This amounted to £80,000 of life cover concerning an amount borrowed of just over £8,000.

My wife's earnings were substantially less than mine at the time and I had managed to pay 10years of the original mortgage through some high interest times on my own up until then.

No alternatives and nothing explicitly mentioned of 'key risk warnings' unless I'm misinterpreting what is written, which is possible.

dunstonh

"It was identified that on your death [meaning my wife] within the specified period, the financial security of your dependents [me only, no children at the time] would be at risk, as it would not be possible to generate sufficient income at that time from your existing arrangements. The sum assured recommended is designed to meet this shortfall".

Your wife (or partner if you were not married at the time) would typically be considered dependent when it comes to having liabilities (like a mortgage). A dependent in financial terms is anyone who is financially dependent upon you. It can be wife, partner, children, parents or others. It also will be lifestyle and not just debts.

This amounted to £80,000 of life cover concerning an amount borrowed of just over £8,000.

It sounds like the letter has been written on the basis of providing overall financial security rather than covering one specific liability. Thats certainly what the letter is saying anyway and it would explain the difference in sum assured.

No alternatives and nothing explicitly mentioned of 'key risk warnings' unless I'm misinterpreting what is written, which is possible.

If its pure life assurance (no investment element) then there are not really any alternatives to list (and its only alternatives which could be considered equal or better, not those that are worse). If its not investment linked then there are virtually no risk warnings either. If there was an investment elment then you are in to a whole list of risk warnings (i.e. past performance, risk profiling, impact if investment returns are not met, comparisons with pure life versions etc).

mikeyg_2

I was thinking that adding my wife to the endowment policy would have been an alternative as it would have increased the monthly investment which would presumably have increased the payment on maturity. Thereby reducing the risk of there being a shortfall on the target amount.

But it seems from what your saying it seems like I have no basis for complaint?