Have I been Mis Sold Life Insurance?

chapers2000

In 2002 my partner and I got a mortgage with HSBC. We were told that we HAD to have life insurance as part of the mortgage, although I already had cover through my work and pension. They insisted that the insureance had to be their own and that if we didn't accept then we wouldn't be entitled to the mortgage. We paid this until we moved house in 2007.

Have we been mis sold this insurance and are we able to claim this back? Any help or advice is greatly received.

dunstonh

We were told that we HAD to have life insurance as part of the mortgage

Which is allowed if the lender requires it (in the 80s and 90s it was often mandatory but late 90s to date some deals are dependent on you buying the insurance.

Have we been mis sold this insurance and are we able to claim this back?

No. If the deal required it then that is allowed.

Plus, even if you were mis-sold you are going to have difficulty proving it and if death-in-service is the only alternative then you cant claim you didnt have a financial need for it either.

magpiecottage

chapers2000 wrote: »

We were told that we HAD to have life insurance as part of the mortgage

That could be "had to" as in compulsory - you would not be permitted the mortgage with out it - or as in "essential" - you are not compelled to have insurance to cover medical emergencies if you go abroad but most people would take the view that it is needed anyway.

I already had cover through my work and pension

Which is not generally suitable, even if it did cover the mortgage, because there is no guarantee you will be in the same job, or your employer will provide cover, for the whole time you have a mortgage.

They insisted that the insureance had to be their own

Banks normally did only offer in house products by that time.

and that if we didn't accept then we wouldn't be entitled to the mortgage.

That could be the case. If one of you died and the other could not repay it then they would either lose their money or have to kick the survivor out - which has considerable reputational risk.

Have we been mis sold this insurance

If you were told the policy was compulsory when it was not or if it was compulsory, that you had to take it from them when you did not.

Otherwise no.

are we able to claim this back? Any help or advice is greatly received.

Only if you can prove a missale is more likely than not to have occurred.

What you have said indicates that it might have happened but it is more likely that it didn't.

marshallka

magpiecottage wrote: »

That could be "had to" as in compulsory - you would not be permitted the mortgage with out it - or as in "essential" - you are not compelled to have insurance to cover medical emergencies if you go abroad but most people would take the view that it is needed anyway.



Which is not generally suitable, even if it did cover the mortgage, because there is no guarantee you will be in the same job, or your employer will provide cover, for the whole time you have a mortgage.

Banks normally did only offer in house products by that time.

That could be the case. If one of you died and the other could not repay it then they would either lose their money or have to kick the survivor out - which has considerable reputational risk.

[QUOTE
Have we been mis sold this insurance

If you were told the policy was compulsory when it was not or if it was compulsory, that you had to take it from them when you did not.

Otherwise no.



Only if you can prove a missale is more likely than not to have occurred.

What you have said indicates that it might have happened but it is more likely that it didn't.[/QUOTE]
Reading what I have been googling this morning there is also no guarantees that any insurance (life, critical illness etc) would pay out anyway! Seems they are all RISKS... life is full of them and insurance should never be a "risk".

dunstonh

Reading what I have been googling this morning there is also no guarantees that any insurance (life, critical illness etc) would pay out anyway!

Over 95% of CI claims are paid out. Life assurance even higher. So you need to put it in some context.

marshallka

dunstonh wrote: »

Over 95% of CI claims are paid out. Life assurance even higher. So you need to put it in some context.

Perhaps I need to google that one then too. I was perhaps being a little cynical/critical after reading so many news reports and FOS complaints about failings. I know that some insurance is worth it but there does need to be more clairity perhaps on what is classed as disclosure and what is not from what I read today.

magpiecottage

With life cover, it is normally fairly easy to persuade everyone that the person has died (assuming they were not Elvis!).Refusal to meet the claim would normally only be as a result of non-payment of premiums, non-disclosure or, in some cases, suicide.

Critical illness claims can be refused for the same reasons (obviously it won't pay for suicide but might not for a self-inflicted disability).

However, the biggest problem with CI is that it will only pay out if the illness is one specified in the policy document AND of sufficient severity. It would not pay for something almost as bad or similar to something specified but actually slightly different.

dunstonh

Perhaps I need to google that one then too. I was perhaps being a little cynical/critical after reading so many news reports and FOS complaints about failings.

Yes and no. Back in the early 2000s the insurers were too quick to refuse cases of non-disclosure as you feared. Payout rates on CI claims were closer to 64-75% back then. That was part of the reason why the FOS introduced the non-disclosure rules. That way everyone knows exactly where they stand.

http://www.thisismoney.co.uk/insurance/health/article.html?in_article_id=524679&in_page_id=39