MPPI and Life Cover

misschicken

Hello,

Hopefully someone can help me with this. I took out a mortgage in 1999. On their document called House Mortgage Loan Agreement it states that the Security required was 'A first charge on The Property and a Mortgage Protection Policy with an insurer approved by us for the term of, and at least the amount of, the loan'. A copy of a life assurance policy was then requested before mortgage monies could be released. One of their financial advisors called me to discuss insurance and recommended that I take out Level Term Insurance and also take out a Mortgage Payment Protection Policy. They were aware that I was self-employed and did not explain there would be any exclusions on the policy which might effect me. I took out both polices as advised. I received and continue to receive letters regarding the Level Term Assurance re. changes to the policy amount etc but have never received any paper work at all for the Mortgage Payment Protection Policy.


Should I have ever been made to take out any kind of policy in order to obtain the mortgage in the first place? Is this mis-selling? And with regards to the Mortgage Payment Protection Policy, presuming the exclusions are similar to other PPI policies I now know I would never have been able to claim - as these weren't explained to me at the time the policy was recommended and no policy has ever been sent is this also a mis-sale? Both these policies were taken out in 1999 and I am still paying both policies by DD - are there time constraints in claiming insurance related to a mortgage?

Sorry such a long post!

di3004

Hi and welcome

I'm sure Dunstonh and or MagpieCottage will be able to help with this one for you and be along at some point, good luck.

dunstonh

Should I have ever been made to take out any kind of policy in order to obtain the mortgage in the first place?

yes. Just because the terms of new lending removed that requirement at a later date doesnt mean what they did was wrong when it was required. Going back in time it was very common for lenders to insist on life assurance. Go back into the mid 90s and it was very common for lenders to insist on their own product as well. Some deals even forced you to buy certain insurance products. These were allowable at the time. Even today, if a lender insists you buy life assurance then they can still do so. They just cant force you to buy their product. However, they can force you to buy their product if you want a particular deal.

And with regards to the Mortgage Payment Protection Policy, presuming the exclusions are similar to other PPI policies I now know I would never have been able to claim

The mortgage protection policy would have been an ASU and virtually all of these cover the self employed. Your assumption is wrong.

Is this mis-selling?

no. Nothing you have stated indicates any mis-sale or wrong doing (ignoring the fact it is also pre-regulation).

misschicken

Thank you Dunstonh.

With regards to the ASU - I am self-employed but all of my work is off a temporary, occasional and seasonal nature. I can't guarentee working any minimum number of hours and I don't have a business that can cease trading, I'm just an individual. I claimed PPI back on a CC a while back and these were all exclusions that made the policy useless to me. I'm going to call my mortgage company to get a copy of the ASU policy. If the same sort of exclusions are there and the financial advisor was fully aware that I was self-employed and was aware there were exclusions in place but had failed to tell me would that be mis-selling?

dunstonh

I am self-employed but all of my work is off a temporary, occasional and seasonal nature. I can't guarentee working any minimum number of hours and I don't have a business that can cease trading, I'm just an individual.

You have basically described most self employed people.

I claimed PPI back on a CC a while back and these were all exclusions that made the policy useless to me.

credit card PPI has so many exclusions that its a complete waste of money. ASU was a better quality product. You still could not claim for quiet periods but you could claim if you ceased trading and signed on.

magpiecottage

dunstonh wrote: »

Going back in time it was very common for lenders to insist on life assurance.

Building Societies did not generally require it for repayment mortgages and that applied to those, like Abbey National, who had converted to banks.

However, the High Street banks did require life cover for all mortgages.

Midland was a High Street bank. For those not long enough in the tooth to remember, it was take over by, and now appears on the High Street as HSBC.

misschicken

Just an quick update - the insurance company who supplied the Mortgage PPI policy on behalf of the bank has now confirmed that I would not have been covered. The exclusions for the self-employed were the same as the as the ones on a CC PPI policy - none of which were mentioned by the sales person who told me to take it out. The bank are now investigating.

dunstonh

the insurance company who supplied the Mortgage PPI policy on behalf of the bank has now confirmed that I would not have been covered.

That is the magic bit as far as you are concerned. Whilst most self employed are covered, the policy you have doesnt cover you. An unusual policy in that respect. However, it does mean its unsuitable and should never have been sold to you and therefore you would expect the premiums to be returned to you.

Lleuadwen

Hello

Please forgive me if I have posted this in the incorrect area.

I took out MPPI online in October 2007. The schedule I received detailed a payment of £1,600 for accident, sickness, unemployment per month for 12 months without waiting time.

After speaking to them in the last week about the cover I have found out that they would only pay half my salary which currently would be £1,048 per month and would have been much less in 2007 when the policy was first taken out. Therefore, I have been overinsured for the whole period of the insurance.

They have agreed to repay the overpayment since October 2010 when the annual review took place but not retrospectively. Incidently, the 'annual review' was simply an email telling me of an increase in the monthly premium.

I have not made a claim on this insurance and didn't actually speak to anyone when I took out the policy, everything was done online.

As they have agreed to a refund for some of the overpayment, would you think I have sufficient grounds to ask for a retrospective refund for all the overpayment since the start of the insurance and if that were not forthcoming a case for a full refund?

Your advice would be very welcome and thank you in advance.

Kind regards
A Morris-Hughes

dunstonh

As they have agreed to a refund for some of the overpayment, would you think I have sufficient grounds to ask for a retrospective refund for all the overpayment since the start of the insurance and if that were not forthcoming a case for a full refund?

You can ask them and they can only say no. As you arranged the policy, it is your job to notify them of changes. So, you would be reliant on their goodwill.