Cavendish Insurance up front fee

Shambler

Hi, I have just applied for life insurance through Cavendish.

At the end of the application it is asking me for a £35 fee to be paid now.

They haven't even discussed medical issues and I know that the monthly premium is bound to go up because I have high blood pressure (under control through medication).

If they up the premuim I can pull out but only get back half of the £35 fee.

I'm not sure I like their methods, is it normal to ask for an up front fee like this before even discussing basic medical issues which are going to change the policy premuims?

The fee is for 'setting up' the policy, but to my mind it isn't set up yet, I haven't agreed to accept a policy because I don't know what the premiums will end up at. I don't mind paying a fee when it is finalised but not when it might never be accepted.

lordhaldon

A very good point. I can't believe that a money saving website is endorsing this. Cavendish get their fee - and if for any reason you don't get or take up the life insurance. YOU lose some money. A lot of policies are rated due to health, job or pastime. Martin, publish the figures of policies not taken up - for whatever reason. The same website gives a news feed of up front fees not being acceptable. Why is it acceptable here?

dunstonh

I'm not sure I like their methods, is it normal to ask for an up front fee like this before even discussing basic medical issues which are going to change the policy premuims?

Their methods are fine. You are buying via a non-advised distribution channel for those that wish to DIY. You are not buying their product. You are buying their service and its the service you are paying for with that £35.

If you dont like it then dont use the service. They publish their terms clearly.

Shambler

At the end of their payment form is this,

Please accept this confirmation that I have applied for Life Assurance via Cavendish Online. I have read and understood your Terms and Conditions of Business.
I confirm that I have not sought or received any advice from Cavendish Online in relation to this policy.
I have received a full rebate of the initial commission paid on my policy which has been used to reduce my policy premium. Please therefore accept this written authority to arrange the above plan on my behalf.
Cavendish Online is a Limited Company No. 04045709 and is authorised and regulated by the Financial Services Authority.
Please tick box to confirm you have understood and accept the above declaration.

Since I obviously have not understood their terms and conditions I assume it is OK for me to pull out?

lordhaldon

I am surprised that an Independent Financial Adviser is supporting this method of buying. It should be done with advice and just because it is in the terms and conditions, does not make it right. Obviously legal but not necessarily right.

dunstonh

I am surprised that an Independent Financial Adviser is supporting this method of buying.

If people want to DIY then they should be allowed to have a distribution channel that caters for them.

It should be done with advice and just because it is in the terms and conditions, does not make it right. Obviously legal but not necessarily right.

Why force advice on people? yes, many that DIY make mistakes and will end up financially worse off (such as mixing up terminal illness benefit with critical illness benefit - a common one we see here). However, it is not our right to force people to buy a certain way. Also, IFAs have done execution only for decades. Its nothing new. Indeed, I have done one execution only transaction this morning myself. Its just that cavendish are offering a limited panel on a factory line basis.

Since I obviously have not understood their terms and conditions I assume it is OK for me to pull out?

You will have to ask them but it will be their goodwill. After all you accepted that you read and understood their T&C.

dwsjarcmcd

Shambler wrote: »

At the end of their payment form is this,

Please accept this confirmation that I have applied for Life Assurance via Cavendish Online. I have read and understood your Terms and Conditions of Business.
I confirm that I have not sought or received any advice from Cavendish Online in relation to this policy.
I have received a full rebate of the initial commission paid on my policy which has been used to reduce my policy premium. Please therefore accept this written authority to arrange the above plan on my behalf.
Cavendish Online is a Limited Company No. 04045709 and is authorised and regulated by the Financial Services Authority.
Please tick box to confirm you have understood and accept the above declaration.

Since I obviously have not understood their terms and conditions I assume it is OK for me to pull out?

I have highlighted the really relevant part of the sentence, which will be worth a damm sight more than £35.

-Vita-

A lot of valid points here on both sides of the debate.

Firstly, it's good to have the option of an advised sale (IFA/Insurance Adviser, etc.) or a non-advised sale (Cavendish).

dwsjarcmcd has highlighted Cavendish's unique selling point - they sacrifice 100% of the commission they would have received, which enables the consumer to receive a lower monthly premium then if they hadn't sacrifised all/part of the commission.

However, as a non-advised sale, if you have questions that need answering and/or want to be certain that a certain product(s) are suited to your exact requirements and personal circumstances, then you should seek advice.

Certain advised companies will typically accept all or some of the commission that the insurance providers pays then for introducing the business. This ultimately means that the premiums will be slightly higher than those offered via Cavendish, however, it's for you to decide whether the higher cost - coupled with expert advice - is worth it.

The fact that you will have (or should have) peace of mind knowing that an Adviser has sourced the exact cover needed to meet your protection requirements, at a competitive price, enable you to be content with paying slightly more for the service. Certain advised brokerages offer fee-free advice, so you have nothing to lose by discussing your requirements.

At the end of the day it comes down to personal preference. Depending on the individual, both non-advised and advised services present their own benefits, including costs and service.

lordhaldon

At least Cavendish give you the option to send the money through. There are some on the site that take the fee there and then!