Mis-sold Scottish Widows Level Term Assurance

PoTsyGirl74

dunstonh wrote: »

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)


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.

There is/was no joint assets. We have no financial connection whatsoever. No-one would have suffered in the event of death on either side, hence why I'm convinced the policy should never have been recommended! Am I right?

eta;

the personal summary & recommendations states this:

You wish to protect the standard of living for your partner in the event of your death, so as they would be able to continue to do the things they are used to.

that's not an insurable interest, is it?

opinions4u

Do you and your partner live together?

Is there joint rent or joint mortgage?

PoTsyGirl74

opinions4u wrote: »

Do you and your partner live together?

Is there joint rent or joint mortgage?

Neither ever had a mortgage. We rent privately together now, but at the time no.

opinions4u

PoTsyGirl74 wrote: »

Neither ever had a mortgage. We rent privately together now, but at the time no.

While not clear cut, I think you have a case on life cover and wop. Less so on critical illness cover which is probably the bulk of the premium.

But if the policy is now beneficial and can't be replaced cost effectively elsewhere, it may not be to your benefit to pursue a complaint.

PoTsyGirl74

opinions4u wrote: »

While not clear cut, I think you have a case.

But if the policy is now beneficial and can't be replaced elsewhere, it may not be to your benefit to pursue a complaint.

Thank you for commenting. Our circumstances really haven't changed, and we wouldn't suffer financially should one of us die. We have no ties apart from renting together, and that's only on a short term lease, so the policy isn't of any real benefit.

The personal summary & recommendations also mention they took into consideration mortgage payments!!! Where they got that from I don't know?? There are so many inconsistencies I'm astounded tbh. Feel stupid for not looking at this sooner.

dunstonh

As you were not living together at point of sale, it is a weak link and there probably wasnt a need for life assurance a the time. Problem is that the price of life assurance on top of a critical illness cover policy is often just pence. So, it is daft not to include it. That would require documenting by the adviser though.

With the inconsistency with regards to mortgage, you could now have a good case to get the policy voided.

PoTsyGirl74

dunstonh wrote: »

As you were not living together at point of sale, it is a weak link and there probably want a need for life assurance a the time. Problem is that the price of life assurance on top of a critical illness cover policy is often just pence. So, it is daft not to include it. That would require documenting by the adviser though.

With the inconsistency with regards to mortgage, you could now have a good case to get the policy voided.

Thank you dunstonh. I've contacted LTSB today, and they're arranging for someone from the branch that sold the policy to contact me first thing Monday. I have all the details to hand, including the business card of the FA that sold it to us. Whether he still works there is debatable.

I'm not expecting much from the phone call tbh, apart from them trying to justify their reasons for selling it in the first place, so will put everything in writing aswell to the address given to me by the FSA.

kingstreet

Did you have any children at the time?

PoTsyGirl74

kingstreet wrote: »

Did you have any children at the time?

I had no children, partner had 3. Does that make a difference?

kingstreet

Having children and taking out life cover for family protection would be sufficient insurable interest. How that might be impacted by them being children to only one of you is a good question.

However, the adviser would have to justify in the suitability letter that the cover was for family protection and that the term and sum assured was in some way related to the need for that cover.

Did they do that?

Looking at this, you should consider making a complaint to Lloyds that the cover was not appropriate to your circumstances. Put it in writing and give them the opportunity to resolve it. They have eight weeks to do so. If they don't resolve it to your satisfaction, you have the right to escalate it to the Financial Ombudsman Service (FOS).