Do we need this insurance?

dannimaycox

Hi, for the past year i have been helping my mum to pay back a loan which she has with RBS. I'm 19 and she is 48, she is my full time carer as i have a muscle wasting disease and rely on her 24/7, so we are both unable to work. My mum took this loan out approximatly 3 years ago so that she could take me on a holiday abroad. I decided to help her pay it back when i was 18, we are managing quite well although things are sometimes tight. I was just wondering, she has this £10.45 a month coming out of her account which is life insurance for the loan, i think it's called RSA, does she need this? Could it be cancelled, would it affect the loan if she cancelled it? I dont really understand it.

Thanks

McKneff

It wouldnt affect the loan but its an insurance against her not being able to pay it.

Consider any circumstances whereby she may not be able to pay it. ie loss of any benefits, dare I say it 'death' (sorry)
Does she know what is covered, has she read all the small print. Does it say anything about loss of employed income.

Did she know what she was signing when she took the insurance out.
Was the loan given only if she took out the insurance, if she was sort of blackmailed for want of a better word she could reclaim it back as a miss selling. Were the people who gave her the loan aware of her and your circumstances. I have doubts about someone giving someone a loan who is on benefits. Its unusual to say the least.

Just a few thoughts for you both to think about before taking any further action.

Im sure more knowledgeable people will be along soon but if you could give more information it will help things along.

Regards
Annie

dannimaycox

Thanks Annie, yes i agree i thought it was strange for them to allow her to take out a loan in the 1st place, they knew that she was on benefits and would be highly unlikely to return to work (she's been on benefits since 1991) as my condition can only get worse. I'm beginning to think that maybe this was mis-sold, i don't think my mum would have asked for insurance, she's probably just thought that she had to have it in order to have the loan. She's never had a loan with a bank before until this one, she did have one with Provident which was paid up a while ago but she never had insurance with them.

olly300

Get a printed copy of the insurance terms and conditions. Then see if she is legible to be paid out in her circumstances - a carer or unemployed.

If she is then you can't argue that the insurance has been mis-sold. If she isn't then she has been missold.

McKneff

olly300 wrote: »

Get a printed copy of the insurance terms and conditions. Then see if she is legible to be paid out in her circumstances - a carer or unemployed.

If she is then you can't argue that the insurance has been mis-sold. If she isn't then she has been missold.

How do you mean 'in her circumstances' As far as I am aware and Im quite happy to be corrected but the OPs mum took the loan out when she was 'in the circumstances' not working, carer etc.
that is why Im quite surprised she was allowed to borrow.

OP, can you see the CAB, they would probably guied you better than we can on here. But I just get the feeling that something is wrong somewhere.

But get a copy of the original loan and insurance papers and take them with you to the CAB.

dannimaycox

Yes i think we will go to CAB, my mum says that she was told that without taking the insurance she couldn't get the loan...we'll see what CAB say.

McKneff

dannimaycox wrote: »

Yes i think we will go to CAB, my mum says that she was told that without taking the insurance she couldn't get the loan...we'll see what CAB say.

That really is outregeous.

If that is the case it is a case of miss selling. She could potentially claim all the payments back. Take some advice from the CAB and i really do wish you well.

Please come back and tell us how you get on.

Good luck.