Mortgage PPI / Migp

Rae115

Hi all - is Mortgage protection other wise known as mortage indemnity guarantee premiums claimable.

basically took my 1st mortgage out in 2001 - at the time i worked for a reputable insurance co. Royal Sun Alliance and bought my house through their estate agents Shipways.

The loan for mortgage was provided by NatWest however you had to have everything before mortgages could be agreed critical illness cover etc.

Anyway the estate agents provided cover for everything to me to be paid monthly by the same ins company i was working for.

Now my question is did i need all this as i was working for the said company, an i was entitled to all the benifits you get from work !!!!!! pay, death in service which is really good. so did to have that ins at the time????

i have also found my original mortgage docs talking about mpi, life cover, phi?? criticalm illness cover and retirement cover - (i was 21 at the time)

so my question is am i able to claim this back? and if yes do i go N-West or RSA.

Thanks

kingstreet

A mortgage indemnity guarantee premium, or high loan to value fee is not protection for the borrower.

It is cover taken by the lender to insure the portion over 75% of the loan to value which you wanted to borrow.

For example, if you want to borrow £90k on a purchase price of £100k, a lender may insure the £15k difference between the 75% and the 90% you want to borrow.

In the event of you defaulting, the lender repossesses the property and can sell it for 75%, claiming the difference on the insurance policy you've paid for. As mentioned, the cover does not benefit you, as the insurer has the right to pursue you for the amount paid out under the principle of subrugation.

As to the other things you mention, you need to check the records you were given at the time. You should have a series of quotations and suitability letters which explain the cover you had. These should be cross-referenced with any employer benefits to which you may have been entitled. It's unlikely you will have any claim, but post back here with any thoughts once you've perused the documentation.

Rae115

i have a letter dated 16.1.2001 stating confirm my app is being processed.
current situation

you are 22 and no dependents
your employed as a insurance adviser 10900 pa and wish to retire in 1943.
you do not own your own home
my nbet wort is 3994
i have no will
i have 30K life cover and no critical illnedd and a memeber of contracted out employers pension scheme

them it goes on to recommendations
need area - Mortgage

death benefit £100,970.00 - term 43 years - premium 10.00 p/month

stand alone critical £30,000.00 - term 47 years - premium 6.66 p/month

income protection - £5408.00 - term 43 years - premium 14.51 p/month

migp - 428.88

this is more or less all the info with a lot of jargon.

kingstreet

The things you mention summarise the needs;-

death benefit £100,970.00 - term 43 years - premium 10.00 p/month

stand alone critical £30,000.00 - term 47 years - premium 6.66 p/month

income protection - £5408.00 - term 43 years - premium 14.51 p/month

but it's the reasons why the adviser felt the needs existed and how the products recommended met those needs is what matters.

For example, I'd expect to see something like "we have agreed you need lump sum life cover because ........... and this is best addressed by a RSA ......... policy over ...... years. This is the period you felt important to cover because ......"

It's always difficult to advise someone how to deal with such an issue because without being able to see the documentation you can't form a decent opinion on the quality of the recommendations.

On the face of it, it would be difficult to justify life cover for a single person with no dependents. The term appears too long if it's associated with the mortgage. The critical illness sum assured appears arbitrary. Was there some justification for the amount as it also doesn't appear to match the mortgage, does it?

The income protection recommendation is probably the most accurate if it represents a reasonable percentage of your income and it runs until retirement?

If you feel you want to pursue this, you need to find out who is now responsible for compliance/complaints for old RSA life business as Shipways was an appointed representative. Phoenix Group runs the contracts, but won't be responsible for the initial sales advice.

magpiecottage

I do not think there is a missale here.

Royal Insurance was, at one time, had controlling interests in more estate agents than anybody else and these would have fallen under the ownership of RSA, along with some that Sun Alliance had purchased. However, the estate agencies remained separate legal entities and their staff did not, as far as I am aware, enjoy any entitlement to the staff benefits given to either insurer (and would have no particular reason to know about them).

Unless you actually told them, they would not know and the products you mention all seem prudent in the absence of you were entitled to those benefits.

Rae115

Me again - this is what it states -
I am writing to provide you with a permanent record of our recent discussion and to confirm that your app is being processed.

You will recall that the advise i gave was based on the info you provided in the personal questionair. the enclosed financial summary has been produced from the key info in that questionaire, so foirms an important statement of your position before advise was given.

your have confirmed that no policy has recently been altered asn we agree that no alterations were to be made to current policies for the purpose of the following recommendation(s), and deceided to take out 3 rsa policies ( is this where i have gone wrong???)

the key features doc i ahve already provided descrivbes the policies, their main features anf their benefits. We also discussed the particular reason why they are suitable for your own circumstances and these are recorded on the enclosed recommended sheets.

In addition to the recommendations which has been accepted i also advised you to consider making provision to cover shortcoming providing an income retirement.

I also do recommend you consider making additional coluntariy contributuins to maximise your pensionale income during retirement, as wellas seek professional advise in respect of making a will

Rae115

also already lost money to Phoenix Group as i had some form of ins with them but had a letter years ago - cant remeber about what but also had someone from a newpaper contact me for my story re what happened but i had to pay them to recover it for me - i am now confused.com

Rae115

and yes the adviser new as we even joked it should have been staff rate but was cheaper to go direct - and twice she came to meet me at work to collect my docs and go through forms.

magpiecottage

The fact that the adviser recognised that you might be entitled to a staff rate suggests she did take account of what might reasonably be expected - i.e. that you might get a lower premium going direct, although in reality you did not.

However, she was not an employee of RSA so she could not reasonably be expected to know of the benefits and it sounds as though she completed a fact find and made recommendations based on what you had told her.

An adviser is entitled to accept what the customer says as accurate unless it is manifestly untrue.

The error that set off the train of events leading to the wrong product being purchased seems to have been you providing incorrect information about your entitlements.

So I am afraid that I do not think a complaint should be upheld.

handytips

Rae
Out of interest did you buy your insurances in the first place via a Phoenix group advisor, i would guess as No. The Phoenix group have many forms of I.D. They are basically asset strippers who purchase the servicing rites of policies when a Mortgage Network or Large Brokerage goes into administration. In some cases if a life policy is cancelled within 4 years this creates a commission clawback to the broker (not very nice for the broker) as Phoenix now own the serviceing rites it is their responsibility to ensure the policy is managed correctly. If you have any doubts about any policies you have. I would seek out good independant financial advice from a Mortgage Broker or IFA they will be able to check the policies for you, the fact that the policies were written initially with 43 and 47 year terms on them would suggest to me that they need reviewing.

Rae115

Hi Handytips - i am not sure the original docs i have had the rsa label on them - payment was to phoenix and then a few years later had a letter regarding resolution.

Thank you all - i am gonna look into this in more detail.