Life insurance and critical illness cover

amanda47

Hello all. Need a little advise please I have no idea on financial matters. My Daughter received a letter yesterday from Bupa insurances basically saying that her insurance for life and critical cover will be ending next month, it was for five years cover. Insurance was taken out in 2006 thats when my daughter bought a house with her boyfriend. I cant understand why the financial adviser would sell her insurance for five years when her mortgage is over 25 years. Would this be classed as miss sold ?.
Also would you recommend she sees a IFA to look for another insurance cover for the term of the mortgage or could she look into this herself.

Thank you all for any help.

dunstonh

I cant understand why the financial adviser would sell her insurance for five years when her mortgage is over 25 years. Would this be classed as miss sold ?.

Potentially yes. The recommendation should match the term of the liability.

However, if she is in good health and needs it replacing then it is likely that it is a mis-sale that she has benefitted from. Premiums are lower today than 5 years ago and instead of paying 5 years of premium averaged over 25 years cost, the monthly premium was lower than it would have been. So, she can replace it now for 20 years on a lower amount (assuming repayment mortgage) and should be able to get it cheaper than it would have been.

So, done wrong but probably got lucky and ended up better off because of it.

Also would you recommend she sees a IFA to look for another insurance cover for the term of the mortgage or could she look into this herself.

She can either DIY or use an IFA. The ones to avoid are FAs (tied agents). It is up to her.

amanda47

Her Mortgage is intrest only, we thought at the time this would be best. she will be looking for repayment mortgage as she is better off now financial then she was five years ago,they have always paid over-payments not a lot about £100 a month. :beer: Thank you.