What about Income Protection Insurance?

Gardening_Girl

Can anyone help with this. My husband took out a loan and was strong armed into taking out insurance with it. It's not PPI though its income protection. The benefits were for the same amount as the loan repayments and it started on the same day as the loan and ran for the length of the loan. He was told he couldn't have the loan unless he took it out. I still have all the paperwork. All the discussions seem to be about Payment Protection and nothing about missold Income Protection Insurance.

Thanks folks

dunstonh

When you say income protection do you mean long term income protection or short term payment protection? (former is underwritten at point of sale - i.e. insurance questions asked, latter is not).

Typically income protection is paid by direct debit from your account and not bundled in with the loan. As questions are asked point of sale, it has a good audit trail on whether it is is suitable and it is nearly always put in place under an advice process. payment protection tends to lack the questions and is put in place on a sales process and with loans is added to the debt as a single premium in most cases.

Gardening_Girl

Thanks so much for your reply. It is actual income protection paid monthly separately by direct debit not payment protection although it was sold to him as PPI. As it was taken out on the same day as the loan (the advisor at the bank wouldn't let my OH proceed without it) and as it is for roughly the same amount as the loan repayments and lasts for roughly the same term as the loan I believe this weighs in favour of my argument that it was misrepresented. Now he has had a stroke we find that it isn't PPI (ironic isn't it that I’m actually complaining that we weren't sold PPI). This policy is worthless to us it is actually making us worse off and as we have both paid National Insurance having worked all our lives (60 years worth between us) we could have claimed benefits. I have had to stop working to care for my husband so i'm hopping mad that not only have we been sold a pup, the person who sold it to us made £400 plus for doing it and we are worse off.

Gardening_Girl

Thanks Tomjonesrules but this has been gong on a while so this is a grumble well travelled.
The income protection gives us 50p per week more than the benefit. This means that we do not qualify for income support. Because of this I have to pay almost all our council tax, we do not qualify for cold weather payments and we do not get any help with travelling to hospital which we have to do regularly. The 50p thing really aggravates me as well as the council don't assess the benefit on a sliding scale. I nearly passsed out when I got the bill. I have checked and double checked rung the DWP, benefits advice and the CAB because it couldn't believe it. 50p a week in extra income, means I lose £20 a week council tax benefit and there isn't anything I can do about it.

dunstonh

It is actual income protection paid monthly separately by direct debit not payment protection although it was sold to him as PPI.

Income protection (or to give it the generic historical name of permanent health insurance) is a valuable product. payment protection pales into comparison.

the advisor at the bank wouldn't let my OH proceed without it

Not something that can be proven though. Verbal allegation without evidence rarely works unless something else is wrong.

as it is for roughly the same amount as the loan repayments and lasts for roughly the same term as the loan I believe this weighs in favour of my argument that it was misrepresented.

Income protection pays out until your selected end age which typically has a minimum of age 55 and is more commonly set to your retirement age. Are you really sure this is a real income protection policy and not payment protection policy dressed up to look like an income protection (some payment protection plans do market themselves as income protection but they are still PPI)

Who is the product provider and what is the product name?

My gut feeling is you dont have a PHI but a PPI pretending it is an income protection. I am labouring on this point as PHI is viewed by the regulator and everyone as a vital part of personal protection. PPI on the other hand is far lower down the food chain and easier to find faults with.

However, pending knowing what you actually have, you do have some issues.
1 - verbal allegations without proof are rarely successful unless something else was done wrong. Anyone can say anything was said.
2 - Loan PPi is nearly always upheld on complaint because it is single premium and added to the debt and charged interest on. Yours was not. Yours was actually set up correctly. If they had all been monthly by direct debit, then there would be no PPI issue now.

Gardening_Girl

Thanks again for your reply.

It is a Scottish Widows Income Protection Plan and I have checked and it is a real Income Protection Plan

I would agree about verbal allegations, we had the same advisor when we applied for our last mortgage and I asked him why this product he had sold my OH was so expensive and he told me it was a PPI and would also pay out any remaining balance if he should die. Not true but I can't prove it.

Annoyingly (and i'm not just saying this because you are an IFA) we had our own IFA who we had dealt with for years who was brilliant. This is the only policy we have ever taken out without him and I could strangle my OH for doing it.

Luckily our IFA sorted out our Mortgage Protection and Critical Illness; both were cost effective, paid out without quibble and helped us through the worst time of our life. Having these two policies meant that I didn’t have to worry about where the money was coming from when the SSP stopped and when my husband came home from hospital needing full time care I could stop working to provide it although I miss my job. I would honestly urge anyone not to let this PPI carry on put them off getting the right kind of insurance and a back up plan.

I think from your response I’m on a hide into nothing. The reason I’m grumbling now (we’ve been claiming on this for sometime now) it’s review time again and when I look at how much we have lost because of it I could weep particularly as he didn’t want the insurance in the first place he only wanted the loan.

Thanks for taking the time to respond and look at this for me and read through my grumbling. It’s Saturday night, its getting late and I’m going through our ever depleting finances and feeling sorry for myself. I think the best thing to do is accept that we made a mistake and take it on the chin. At some point I hope I will find a new job to work round my husbands care needs and then it won’t matter as the policy might actually be worth having then.

dunstonh

It is a Scottish Widows Income Protection Plan and I have checked and it is a real Income Protection Plan

That is a permanent health insurance and that means it would have been put in place under an advice process following a factfind, needs analysis and suitability report. PPI has none of those. If PPI had the same level of documentation, there wouldnt be an issue with PPI.

Annoyingly (and i'm not just saying this because you are an IFA) we had our own IFA who we had dealt with for years who was brilliant. This is the only policy we have ever taken out without him and I could strangle my OH for doing it.

As an IFA I am always frustrated when that happens. It happens to others so you are not alone.

I think from your response I’m on a hide into nothing.

Not necessarily. I think you have a harder job than most PPI complaints. However, banks are scattergun in their approach to complaints and at the moment some parts of the Lloyds banking group are auto upholding complaints without investigation. So, you may well get a positive response.