Halifax life cover missold

lornams

My parents have tried to claim against halifax only to be told the life cover they took out with their mortgage is not classed as PPI. They were missold it as they were under the impression they had to take it out to get the mortgage - can anyone advise if there is any way to claim against this please?

[Deleted User]

lornams wrote: »

My parents have tried to claim against halifax only to be told the life cover they took out with their mortgage is not classed as PPI. They were missold it as they were under the impression they had to take it out to get the mortgage - can anyone advise if there is any way to claim against this please?

Life cover is NOT PPI. It's a properly researched policy tailored to the individual. It is often sold as a condition of getting a mortgage and is not mis-sold as a result. I'd say it's very difficult to argue that this insurance isn't necessary or desirable as it protects probably the biggest and most important loan people take out in their lives.
Sorry.

dunstonh

My parents have tried to claim against halifax only to be told the life cover they took out with their mortgage is not classed as PPI.

Which is correct. It is life assurance and not PPI.

They were missold it as they were under the impression they had to take it out to get the mortgage - can anyone advise if there is any way to claim against this please?

That is the weakest complaint reason going and usually ends in a rejection as it is an unprovable allegation. Most normal people take out life assurance to protect spouse when they take out a mortgage. Why do your parents think they are near unique in not needing it?

lornams

Thank you for clarifying, does the fact that they already had another life insurance policy have any bearing? Along with payouts from their pension scehemes had they died whilst in service which would've been more thsan enough to cover the mortgage? Also they were under the impression that the cover was linked to the mortgage but payments continued to be taken after the mortgage ended?

dunstonh

does the fact that they already had another life insurance policy have any bearing?

No. Most people have multiple life assurance plans. Family protection, income replacement, debt repayment etc.

Along with payouts from their pension scehemes had they died whilst in service which would've been more thsan enough to cover the mortgage?

Death in service is a discretionary payment which is designed to go someway to replacing lost income for a few years and reduced pension entitlement. Advisers are not required to include it for debt provision as it doesnt serve that purpose.

Also they were under the impression that the cover was linked to the mortgage but payments continued to be taken after the mortgage ended?

It would have been set up to match the mortgage term and amount at the start. It would expire at the end of it. If your parents kept it running after they repaid the mortgage early then that is their choice. Many people do keep them running. Could you imagine if the lender cancelled it and one of them died. There would be complaints coming in that the lender has no right (and they dont).

lornams

Thanks for responding Dunstonh but I still find it very confusing that if you paid PPI because you believed you had to as part of a loan you can claim it back as being missold, yet if you pay an unnecessary life insurance (a type of protection insurance) because you believed you had to as part of your mortgage (a loan) you haven't got a leg to stand on.
And in case you ask the insurance was definitely unnecessary due to the level of cover in the exisiting policy and the pension scheme payouts, plus they have no debt other than the mortgage.
Also my parents did not choose to continue with the payments, they simply beleieved the payments would stop when the mortgage was paid off due to their belief it was tied to the mortgage and no-one at the bank mentioned it when they paid off the mortgage.

roonaldo

lornams wrote: »

Thanks for responding Dunstonh but I still find it very confusing that if you paid PPI because you believed you had to as part of a loan you can claim it back as being missold

no you cant. this is common mis-persception.

Also my parents did not choose to continue with the payments, they simply beleieved the payments would stop when the mortgage was paid off due to their belief it was tied to the mortgage and no-one at the bank mentioned it when they paid off the mortgage.

it doenst matter, its a stand alone policy, it would still pay out whether there was a mortgage or not. Its up to them to cancel it, it would be correct not to tell them to cancel it if it could still provide cover.

magpiecottage

lornams wrote: »

in case you ask the insurance was definitely unnecessary due to the level of cover in the exisiting policy and the pension scheme payouts, plus they have no debt other than the mortgage.

You say this but how do you know? I am not being awkward, simply asking the questions a good complaint investigator would.

no-one at the bank mentioned it when they paid off the mortgage.

It is unlikely that anybody at the bank knew about it. This may sound odd but the insurance company and the bank are separate. Even if the insurer is a subsidiary of the bank they are required to strictly control the sharing of information between them and for a bank to tell an insurer that a mutual customer had paid off a loan would normally be a breach of the Data Protection Act.

lornams

Thanks Roonaldo and Magpie, I'm just trying to get my head round this as I do not know much about financial affairs, I just find it hard to separate the two issues as I don't see what the difference is between this life cover (which was classed a spart of the Halifax's Total Mortgage Protection Plan) and PPI.
As far as I'm concerned my parents were led to believe they needed to make these payments in order to get their mortgage but actually they did not need them. In answer to your question Magpie the cover of the policy they already had was enough to pay off the mortgage and then there would've been a payout from the pension scheme on top of that, so financially there was no need for them to have this extra cover.
If there is no legal grounding to complain about this then so be it but I stand by my belief that my parents were talked into taking out something they did not need and in doing so the Halifax has failed their customers as they are over £2000 out of pocket for something they simply did not need but were led to believe they had to have.

dunstonh

As far as I'm concerned my parents were led to believe they needed to make these payments in order to get their mortgage but actually they did not need them.

OK, what evidence do they have to support that view? Almost certainly none. Hardly any complaints would get upheld on that basis. Even PPI complaints.

In answer to your question Magpie the cover of the policy they already had was enough to pay off the mortgage and then there would've been a payout from the pension scheme on top of that, so financially there was no need for them to have this extra cover.

It is unlikely that it would still be enough. Most people are woefully underinsured. You have to factor in lost income to being with. Then reduced or even removed pension provision. then debt provision. Most people need around 10 times their income as a guide figure and then the debt figure added on top. With death in service typically being 1x to 4x this leaves a large shortfall.

I very much doubt they didnt have a financial need for it. In nearly 2 decades of financial advice, I have never seen a couple that have been adequately insured.

If there is no legal grounding to complain about this then so be it

They can complain about anything they like. Even the colour of the carpets in the branch However, you are looking here at whether there is a case to answer and at the moment, there doesnt seem to be a case to answer.

TO give you a quick and dirty idea of how much income replacement can be, £100,000 of life assurance would produce around £5000 of income. So, someone earning £20,000 could see as much as £400,000 being needed to replace that income. How much life assurance did they have on top of their death in service? How does that fit in with that quick and dirty figure?

redbrick555

hi, i wish i had seen this thread 2 years ago, probably too late but i have exactly the same issue as your parents. dont agree with any of the opinions voiced in reply. Irrespective of the generic PPI issue there was a real culture of bank/financial organisation staff being incentivised to sell "products" which fotumately has been debunked. So dont give up, take this up with the financial ombudsman. halifax will stone wall and fight back but if like me your parents remember the inteview as if it were yesterday where we were told this life assurance was a pre requisite to the morgage acceptance and subsequently denied that this was the case at every turn amounts to at best dishonesty or at worst not knowing the culture of what was happening in the branches. Bon chance