Missold life insurance - no dependants

cdc1811

Hi I have seen a lot on this site regarding mis sold PPI with mortgages but do not know if this also applies to life cover. When I bought my very first home, a studio flat, back in February 1998 I took out a mortgage with what was then Midlands Bank and later became part of HSBC. I remember being told by the advisor in the bank that I should take out life insurance. I naiively agreed but think I may have been wrongly advised as the bank knew I was single at the time and had no dependants - the property I bought was a studio flat and the bank also required details of my personal circumstances. No one would have benefited from any sort of insurance policy I had upon my death. I eventually cancelled the policy in October 2000 as I realised I had no need of it. I also found out that as a teacher I had always had some sort of life insurance provided with my subscription to my teaching union. The only document I can find relating to the life insurance policy is a letter from HSBC Life (UK) Ltd dated 31st October 2000 which confirms that the policy has been cancelled and that life cover has ceased. Does anyone know if I could claim back for the 2 years and 8 months that I paid what I believe to be an uneccesary premium? If so how would I go about making a claim?

creditcardhelp11

You don’t need to have dependents to have life insurance. If the advisor was trained/certified to give the advice and explained all the details then you were not mis sold. However, you could (if the case) argue that the insurance was sold to you without being explained and (if true) the advisor should have said you can get the same from other providers etc.. if s(he) didn’t then you can ask for a refund in writing by recorded delivery and escalate to FoS if not satisfactory or no response within 8 weeks.

Wutang_2

creditcardhelp11 wrote: »

You don’t need to have dependents to have life insurance. If the advisor was trained/certified to give the advice and explained all the details then you were not mis sold. However, you could (if the case) argue that the insurance was sold to you without being explained and (if true) the advisor should have said you can get the same from other providers etc.. if s(he) didn’t then you can ask for a refund in writing by recorded delivery and escalate to FoS if not satisfactory or no response within 8 weeks.

Maybe but unlikely to happen...

dunstonh

Hi I have seen a lot on this site regarding mis sold PPI with mortgages but do not know if this also applies to life cover.

Any product can be mis-sold.

When I bought my very first home, a studio flat, back in February 1998 I took out a mortgage with what was then Midlands Bank and later became part of HSBC. I remember being told by the advisor in the bank that I should take out life insurance. I naiively agreed but think I may have been wrongly advised as the bank knew I was single at the time and had no dependants

Yes. That is a mis-sale. Being single with no dependants and no-one living with you or helping you with the cost of the mortgage means that you do not need life assurance.

I also found out that as a teacher I had always had some sort of life insurance provided with my subscription to my teaching union.

That is largely irrelevant. It is your responsibility to inform the adviser of any plans you have when they ask you about existing plans. If you dont tell them, they cannot be expected to know. In reality, these union supplied plans tend to be rubbish. Either small sum assured or just accidental death insurance rather than full life assurance.

Does anyone know if I could claim back for the 2 years and 8 months that I paid what I believe to be an uneccesary premium?

Based on what you have said, yes you can for the reason of being single with no financial dependants (boyfriend/girlfriend living with you at the time would be classed as dependant).

If so how would I go about making a claim?

you are not dead and the policy is not in force. So, you cannot make a claim. You need to make a complaint to HSBC stating you were single and had no financial need for it. As simple as that.

kingstreet

When you bought the flat and were discussing the implications of death, did you discuss what you would like to happen with the adviser?

Did you suggest you were happy for the lender to repossess the property to recover the mortgage debt or did you suggest, or agree with a suggestion from the adviser, that you'd like the flat to pass to a relative with the mortgage repaid?

Over the years I've had a few clients who were single with no dependents who decided to take life cover when the implications/options on death were explained to them.

The other issue is critical illness cover. If the life cover had critical illness cover bolted-on to it, the life cover may have been almost cost-free and a better idea than stand-alone critical illness cover with its "survivability" period.

magpiecottage

Looking at this case, the fact that it was apparently sold by an employee of Midland means it is in FOS jurisdiction because it was then under Banking Ombudsman Jurisdiction.

However, I think the chances of a complaint being upheld are fairly slim.

It is possible that Midland made life cover a condition of the loan but even if they did not your decision to cancel suggests you knew as long ago as 2000 that you had grounds for complaint.

In those circumstances, why did you wait 11 years to do anything about it?

dunstonh

However, I think the chances of a complaint being upheld are fairly slim.

Is that only due to the time that has passed?

We have been told a few months back that the FOS are upholding complaints on single with no dependants (unless mandatory) and level term assurances where decreasing term should have been used (unless overridden by client/insistent client)

magpiecottage

dunstonh wrote: »

Is that only due to the time that has passed?

That is the main reason. If the OP cancelled the policy in 2000 that suggests he was already dissatisfied with it. So he would have had three years from then or, if later, six years from the original advice to make a complaint.

Clearly both those time limits have expired because he cancelled over eleven years ago.

We have been told a few months back that the FOS are upholding complaints on single with no dependants (unless mandatory)

Cover may have been a requirement of the loan at outset. Building Societies have not normally required it for a repayment mortgage but historically banks did. The terms of the mortgage would specify this.

and level term assurances where decreasing term should have been used

That would apply to members of your network because they are Independent Financial Advisers who could choose decreasing term in preference to level term. However, a number of lenders only offered level term.


Incidentally, term assurance sales were not regulated before 2005 at all. In this case, it would fall under Banking Ombudsman jurisdiction and perhaps the Mortgage Code but an independent adviser who simply arranged the life cover after being introduced by a mortgage broker at that time would not fall under FOS jurisdiction.

(unless overridden by client/insistent client)[/QUOTE]