mis-sold life insurance/assurance

thebestgingersnapz

I've just realised that it is likely that I was mis-sold life assurance when I took out my mortgage. I've been paying Royal Liver, £28 per month for nearly five years - totaling over £1600. I was single and 27 yrs old at the time - so it was completely inappropriate for me to need it. Critical illness/injury was also included, even though my health was perfectly fine.

Does anybody have any experience for the correct procedure for complaining about this, or even reclaiming the premiums? I was convinced that it was a necessity for the mortgage.

Any advice would be really appreciated.

ihateyes

thebestgingersnapz wrote: »

even though my health was perfectly fine.

.

you have to healthy when you take critical illness out.

opinions4u

Complain to the seller.

Ask them to establish why they sold you the policy when you were single with no dependents.

Critical illness/injury was also included, even though my health was perfectly fine.

You're insuring against the risk of a critical illness. They're hardly going to sell you a policy if you were already suffering from cancer.

But if you are in good health at the time of taking out the policy and then suffer a heart attack in 10 years time, the policy will pay out.

The most likely reason for selling critical illness cover is to provide you with a financial cushion should this situation arise. That makes it a good reason for sale. The life cover is less obvious, but if combining life and critical illness cover in to one policy only costs a couple of quid a month extra then many people would agree to do this.

I don't think it's a mis-sale. The policy serves a purporse that you could benefit from.

dunstonh

Critical illness/injury was also included, even though my health was perfectly fine.

That is the time to take it out. Its too late when you are unhealthy.

so it was completely inappropriate for me to need it.

Not necessarily. To add life assurance onto a critical illness policy can often only cost around £1 more. So, many people who dont need life assurance straight away do it as it is cost effective in the long run.

The critical illness element is certainly not a mis-sale based on what you have said. The life assurance could be but seeing a its likely only around £1 pm on the premium then its hardly worth the effort and the broker could easily justify it.

If you used a local broker, then be prepared to burn your bridges with them if you make a complaint. So, make sure that its not a misunderstanding on your part or something you forgot before you do it.

kingstreet

Just to expand on what the others have said, critical illness cover has a survivability period. If you die within that period, there's no critical illness payout. When you tell a client about this and explain adding life cover has little or no additional cost, they can often feel life cover is important even if they have no dependents.

I had a case recently where a client agreed with me and decided he'd rather leave the property unencumbered to his brother than have his brother sort out the mess of selling the house and repaying the mortgage. Especially as there was no additional cost for the life cover when added to the critical illness cover he actually needed.

magpiecottage

thebestgingersnapz wrote: »

I was single and 27 yrs old at the time

Sorry - I'm missing something here. You now realise you were single five years ago but didn't then?

Short of you receiving a brain transplant, I do not see how that can happen.

This may sound a little rude but if I were looking at your complaint that is the first question I would be asking myself.

Critical illness/injury was also included, even though my health was perfectly fine.

That would only make the product inappropriate if you could guarantee your health would remain "perfectly fine" until you repaid the mortgage. How could you possibly know that?

I was convinced that it was a necessity for the mortgage.

What do you mean by "a necessity"? "Necessity" can mean "compulsory" but it can also mean "imprudent not to".

There is no law that says I must look both ways before crossing the road but I still consider it a necessity.

SandC

The life assurance/critical illness joint thing has been explained as above.

As a single person, what happens if you get cancer and can't work for a year or more? Do you want the worry of losing your house because there is no other income in the household?

There is your answer as to why critical illness cover is something a single homeowner needs to seriously consider (although imo permanent health insurance is my preference and might be worth looking into instead of what you have).

I too agree there was no mis-sell here and actually, a lot of lenders do require it as a condition of giving you a mortgage.

thebestgingersnapz

Thanks for the replies - as I'm now clearer on what is going on - I still think I've been paying over the odds for the premium though, but that's a different matter. it's reassuring to know that I haven't been "had" on it.

Magpiecottage - I don't really know why you have to be rude about my post - you're not Judge Judy and neither can you assume the full meaning of what I wrote because it's non-verbal communication. You've also failed to read the post correctly, hence your misunderstandings. You may need a brain transplant to correct this problem.

weighty1_2

Hi thebestgingersnapz,

Glad you feel that the replies have been useful. As per the general consensus, the critical illness cover is an extremely beneficial insurance should you ever need to claim on it (until that day's it's worthless in reality, but who knows what's round the corner). That said, SandC makes a good point that income protection PHI may be a better alternative, depending on your work related benefits, occupation and whether you are still single. PHI and life cover may also be a cheaper alternative depending on your job, sick pay benefits, health etc.

If you are looking to replace the plan just make suer you get the new cover sorted first. Royal Liver stopped accepting new insurance business about 9-months ago, so if you cancel only to find difficulty in arranging alternative cover it might not be easy to get the plan placed back into effect.