Critical Illness Cover

leo01

My husband and myself took out Critical Illness Cover with Natwest in 2005. We changed our mortgage from A&L and we were told that we needed this to cover us until our mortgage ended. They said it was the best cover that we could get. We pay £132.45 a month and a friend of ours has told us that we did not need to take this cover out as we were already well covered on one of our insurance policies and that after reading the material about the cover that they probably would not pay out in certain cases. The advisor made us so scared of not taking it out especially when my other halfs mum had just passed away from cancer that we thought we had better do it. Does anyone think it is worth my while contacting Natwest to see what they say.

di3004

leo01 wrote: »

My husband and myself took out Critical Illness Cover with Natwest in 2005. We changed our mortgage from A&L and we were told that we needed this to cover us until our mortgage ended. They said it was the best cover that we could get. We pay £132.45 a month and a friend of ours has told us that we did not need to take this cover out as we were already well covered on one of our insurance policies and that after reading the material about the cover that they probably would not pay out in certain cases. The advisor made us so scared of not taking it out especially when my other halfs mum had just passed away from cancer that we thought we had better do it. Does anyone think it is worth my while contacting Natwest to see what they say.

Hi and welcome.

I think Dunstonh will be the best to help on this one, but in my opinion if you were already protected with another insurance, there would be no need to have another, so if you were made to take this out, and have no need for it, you should be able to make a reclaim.

Let Dunstonh clarify on this and take it from there, good luck.;)

leo01

Thanks Di3004 - I will do that.

di3004

leo01 wrote: »

Thanks Di3004 - I will do that.

Your very welcome.;)

Good luck.

dunstonh

They said it was the best cover that we could get.

They are tied sales reps. So, you are going to get fed rubbish lines like that. However, those sorts of comments are not mis-sales. Its just sales rubbish.

We pay £132.45 a month and a friend of ours has told us that we did not need to take this cover out as we were already well covered on one of our insurance policies and that after reading the material about the cover that they probably would not pay out in certain cases.

CI cover pays out on diagnosis of a range of specified critical illnesses. It does exactly what it is meant to do. It wont pay out on things it wont cover. So, nothing wrong there.

he advisor made us so scared of not taking it out especially when my other halfs mum had just passed away from cancer that we thought we had better do it.

The adviser has a regulatory responsibility to make you aware of potential shortfalls and the consequences of not covering yourself in those areas. Often the consequences are scary. Also, having a friend or relative pass suffer a claimable event is often a driver for people to consider their own insurance.

Does anyone think it is worth my while contacting Natwest to see what they say.

Nothing you have said in your post suggests a likely mis-sale. A little bit of BS from the sales rep but nothing you can prove and it isnt something that would result in a mis-sale anyway.

Unlike most PPI, CI and life assurance is sold under an advice process. So, they will have a factfind, a needs analysis and a recommendation report. You can have as much cover as you like but generally the ideal level of CI cover is around 4 times your income plus the value of all your debts. So, unless you are over those limits by a long way then its unlikely to be a mis-sale

unlike PPI you cant complain you are not eligible (as its underwritten at point of sale), you cant complaint single premium as its paid monthly. You cant say the person wasnt qualified as they are. You cant say they didnt know your circumstances as they do.

So, what would be the reason for your complaint that you have evidence on that can trump all the documentary evidence they have to say you need it?

halphy

Could u not claim on the basis they had cover already?

Did the advisor ask you that?

dunstonh

Could u not claim on the basis they had cover already?

No. You can basically have as many policies as you like for as much as you like within underwriting limits. For CI cover, the maximum under normal retail plans was £500k.

A lot of people have multiple plans. One for mortgage and one for family protection or personal protection on top of the mortgage amount.

halphy

Ah, its much harder to claim mis sell , Has anyone tried and succeeded?

dunstonh

halphy wrote: »

Ah, its much harder to claim mis sell , Has anyone tried and succeeded?

I have once and won. However, it was an unusual case and I was able to get evidence from papers the client had kept going back 15 years and it was in relation of a mortgage that did not proceed but the bank still started the life assurance but 18 months later on reapplication they agreed the mortgage and the sold an endowment. So, it was clear that there was no financial need for a mortgage related term assurance at the point of sale. If it had been a level term assurance, then it would have stood no chance.

I am reading the first post as if there is only one insurance policy. If there is two, then there is a possibility. Can leo01 confirm if there is one or two as its not clear from the first post?

Can you also confirm if we are talking life and CI cover or just CI cover?

If there are two then there is a possibility that if both are decreasing term assurances and the they both match their respective mortgage amounts and term, then you could claim the second one as a potential mis-sale on the basis that cover already existed and that only any further borrowing should have been looked at or a full rebroke of cover (replacement). However, most tied agents are not allowed to recommend cancellation of other providers plans.

If either the original or the second one is a standalone CI policy on a level term basis (i.e. fixed sum payout) then it will be easy for them to reject.

leo01

Hi Dunstonh sorry that I did not reply earlier. The cover is life assurance and CI. The rep did not ask if we had any other cover. We also have endowments which at that time would have cleared our mortgage. Also if anything happened to my other half he would get 3 times his salary. So he is quite well covered. Should she have not checked all this before offering us the cover?

dunstonh

So he is quite well covered.

3x DIS and a bit from an endowment is likely to be lower than than the ideal requirement. Especially if you have children. Typically, for life assurance you are talking about all debts plus around 10x income.

The cover is life assurance and CI.

Is it a decreasing term assurance (sometimes called mortgage life assurance or similar) or is it a level term assurance?

Should she have not checked all this before offering us the cover?

Yes. And you may actually win this case on the basis that the needs analysis is wrong IF the product sold was decreasing term assurance. If it was level term assurance then its unlikely.

You should cover the financial need. For most families, there is usually more than one need. The most common two needs are mortgage and replacement income. So, you would typically have one plan to cover the mortgage and one (or more) plans to cover the "family" needs. If you have two plans to cover the mortgage and none to cover the family (or not enough) then it clearly hasnt been set up right. So, whilst you still dont have enough life cover, you may win on a technicality that the wrong product was sold to meet a need that was already covered.