5 year ins what a con

dripbrain

When we renewed our mortgage after coming out of a fixed term instead of having the MPP which we did have in place we opted for a sickness & redundancy type the chap selling us the new mortgage wanted us fully armoured as he put it....It was running for 18 months and last Jan the insured as in my husband took ill this turned out to be MS and the ins kicked in and was covering just about our mortgage payments....Thank God and we thought well we have this fantastic ins in place for at least another 2 1/2 years so hopefully we will be ok for a while...the actual pay out of monthly payments was for only 12 months which ceased this Jan 07 with no warning.
Now as we bought a block of this ins of 5 years I remember very clearly not being convinced that we should spend this money and have it added to our mortgage loan and no where can I recall this chap saying you would only ever receive a 12 month pay out as what would be the point of having the 5 years cover
Have we been conned and should we seek legal advice

dunstonh

You havent been conned but charging 5 years of accident, sickness and unemployment insurance up front like that is a breach of FSA rules and you should complain.

A firm was fined end of last year for doing exactly this.

Capital Mortgage Connections Ltd (“Capital”) was fined £175k on 21 November 2006 for rule breaches including, inter alia, Capital’s failure to treat its customers fairly by being unable to demonstrate that it gave appropriate pricing information on the accident, sickness and unemployment (ASU) insurance policies (a type of PPI policy) it sold. An FSA investigation found that over 97% of ASU insurance polices sold by the firm were on a single premium basis. Capital was unable to demonstrate that it advised its customers of the potentially cheaper monthly option and gave suitable pricing information to them. The regulator instructed Capital to carry out a past business review to all existing single premium ASU insurance policy customers to ensure they are fully aware of the benefits, cost alternatives, terms and conditions of the product they have and the reasons why they
were recommended the single premium plan.

So, put a complaint in about it being sold up front when it would have been better to be monthly and that you werent told it would only pay out for 12 months. If it was added to the loan, also put a complaint in that you werent told you would pay interest on it as well.