Mis-sold Scottish Widows Level Term Assurance

PoTsyGirl74

kingstreet wrote: »

Is the issue the life & critical illness cover or the waiver?

On a £30 a month premium, the cost of the waiver is around 90p.

I suspect this will be an advised sale and LTSB will produce a factfind, illustration and demands & needs statement all signed by the applicants confirming the acceptance of the advice.

They may have couched the protection sale as a "review" or something similar and I'd be surprised if there's any mention of the loan in the protection recommendation.

The issue's the actual cover kingstreet. I do have a personal summary and recommendations, is that the same as demands & need statement? there is a statement on this that bothers me, which is as follows;

You are able to commit £30 per month to a level term assurance with critical illness plan, with payment cover, providing £57978.00 of cover, over 20 years. My recommendation is therefore to take the plan stated. The consequences of this are that you are protecting yourself by less than the recommended amount ie, you are protecting yourself by a smaller amount than that recommended. This could mean that you are unable to maintain your standard of living in the event of a death or attaining a specified critical illness.

a tad contradictory I think?

The payment cover (WOP) is £1.70 a month, and they charged £594 for arranging the plan. Neither of which were made transparent at the meeting.

I contacted the FSA earlier, and they've advised to put a formal complaint in writing to Lloyds. I'm still unsure whether it's worth it?

dunstonh

a tad contradictory I think?

No. When they have done their needs analysis, they have worked out that you require a certain amount of life assurance. However, you were willing to only pay £30pm and therefore the amount of the cover is insufficient to meet the full need. It is the standard wording (more or less) that any adviser would use where the product purchased doenst meet the full need due to budget.

The payment cover (WOP) is £1.70 a month, and they charged £594 for arranging the plan. Neither of which were made transparent at the meeting.

They didnt charge £594. That it the commission that Lloyds make out of it. That is factored into the £30pm premium. Not an additional cost on top. The problem you have if you argue on that point is the illustration issued at point of sale and the one that arrives in the post direct from SW with the cancellation rights does show that information. So, on paper, it does appear they disclosed it.

I contacted the FSA earlier, and they've advised to put a formal complaint in writing to Lloyds. I'm still unsure whether it's worth it?

I wouldnt be confident. The banks tend to say things that are wrong or misleading. It is a constant frustration for us Independents as we get tarred with their failings. However, they do tend to be very good on the documenting side and documentation is king in any complaint.

You have a few allegations of wrong doing but nothing to back it up. They have illustrations showing the information. A needs analysis showing you have the need for the life assurance and a report issued to you showing the reasons why. These blow verbal allegations out of the water.

Life assurance doesnt get that many upheld complaints at the FOS. You would mainly have to show that you didnt need the policy. The problem is that it appears you did. I have put in complaints on behalf of new clients over the years, including one to Lloyds. However, based on the limited information on what you have said so far, I wouldn't be inclined as the chances of success seem slim. How do you fight the documentary evidence?

PoTsyGirl74

dunstonh wrote: »

No. When they have done their needs analysis, they have worked out that you require a certain amount of life assurance. However, you were willing to only pay £30pm and therefore the amount of the cover is insufficient to meet the full need. It is the standard wording (more or less) that any adviser would use where the product purchased doenst meet the full need due to budget.


They didnt charge £594. That it the commission that Lloyds make out of it. That is factored into the £30pm premium. Not an additional cost on top. The problem you have if you argue on that point is the illustration issued at point of sale and the one that arrives in the post direct from SW with the cancellation rights does show that information. So, on paper, it does appear they disclosed it.



I wouldnt be confident. The banks tend to say things that are wrong or misleading. It is a constant frustration for us Independents as we get tarred with their failings. However, they do tend to be very good on the documenting side and documentation is king in any complaint.

You have a few allegations of wrong doing but nothing to back it up. They have illustrations showing the information. A needs analysis showing you have the need for the life assurance and a report issued to you showing the reasons why. These blow verbal allegations out of the water.

Life assurance doesnt get that many upheld complaints at the FOS. You would mainly have to show that you didnt need the policy. The problem is that it appears you did. I have put in complaints on behalf of new clients over the years, including one to Lloyds. However, based on the limited information on what you have said so far, I wouldn't be inclined as the chances of success seem slim. How do you fight the documentary evidence?

I take your comments on board, thank you.

ACG

By the sounds of your posts they have told you theyre providing life and CI to cover the loan, however they have provided life and CI for no specific need as such, more as "family protection" according to their paperwork?

If thats the case then i would also be feeling a little hard done to.

That being said, the time to query this would have been at the time of application ie - the paperwork doesnt match your discussions...or at the very least at time of claim.

I can see your view of this, and in all honesty i dont read the paperwork of everything i sign upto (i got caught out with a phone rep increasing my contract from 18 months to 24 without me knowing until i thought it was upgrade time).
Ive learnt my lesson - always read everything, query anything and get it in writing.

PoTsyGirl74

ACG wrote: »

By the sounds of your posts they have told you theyre providing life and CI to cover the loan, however they have provided life and CI for no specific need as such, more as "family protection" according to their paperwork?

If thats the case then i would also be feeling a little hard done to.

That being said, the time to query this would have been at the time of application ie - the paperwork doesnt match your discussions...or at the very least at time of claim.

I can see your view of this, and in all honesty i dont read the paperwork of everything i sign upto (i got caught out with a phone rep increasing my contract from 18 months to 24 without me knowing until i thought it was upgrade time).
Ive learnt my lesson - always read everything, query anything and get it in writing.

Appreciate your comments ACG,

Admittedly I was extremely financially naive back then, and I really should've done something about this a lot sooner. I'm kicking myself now for not cancelling it as soon as the loan was settled. Ah well, like with everything in life, you live and learn. I still maintain the advice given was not in my best interests though

weighty1_2

Why cancel the cover?
I mean, based on you having a chronic condition it may be extremely difficult for you to arrange cover again in the future, so why not keep it running on the basis that you are still protected by the life and critical illness element, albeit you can't benefit from the waiver of premium part?

PoTsyGirl74

weighty1 wrote: »

Why cancel the cover?
I mean, based on you having a chronic condition it may be extremely difficult for you to arrange cover again in the future, so why not keep it running on the basis that you are still protected by the life and critical illness element, albeit you can't benefit from the waiver of premium part?

That's a valid point weighty1, thank you. I'll definitely take that into consideration before making any hasty decisions.

PoTsyGirl74

dunstonh wrote: »

You have a few allegations of wrong doing but nothing to back it up. They have illustrations showing the information. A needs analysis showing you have the need for the life assurance and a report issued to you showing the reasons why. These blow verbal allegations out of the water.

Hi dunstonh,

I read a comment today from you on another thread about this type of insurance, where you mention the need for an 'insurable interest'. Can you clarify this to me please? When our policy was set up the only debt was the personal loan that was serviced at the same time for around £13,000 in my name only. Would that be considered an insurable interest then? My partner (cohabiting only) would not suffer financially in the event of my death and vice versa, so was there an actual need for such insurance? and should it have been sold if there was no 'insurable interest'? bit confused, so would appreciate some clarity?

starrystarry

You have unlimited insurable interest in your own life, so that's not a path you should try to follow (assuming you're the owner of the policy).

dunstonh

I read a comment today from you on another thread about this type of insurance, where you mention the need for an 'insurable interest'. Can you clarify this to me please?

You cant just take out life assurance on anyone. You need to be suffering a loss basically if they die. A general rule of thumb is that if anyone is worse off in the event of your death then that person has an insurable interest and a financial need for life cover exists. Where no-one is worse off in the event of your death, then the policy should not be recommended. (financial need and insurable interest are two different things but closely linked. If there is a need then there is an insurable interest)

When our policy was set up the only debt was the personal loan that was serviced at the same time for around £13,000 in my name only. Would that be considered an insurable interest then? My partner (cohabiting only) would not suffer financially in the event of my death and vice versa, so was there an actual need for such insurance? and should it have been sold if there was no 'insurable interest'? bit confused, so would appreciate some clarity?

The debt itself could not be passed to your partner but the could call upon joint assets to repay it. So, the partner would lose those joint assets and therefore have a financial need.