Missold life insurance?

Sugardonut

Hello

Before my DH and i married, we bought a flat together. Our mortgage advisor at the time arrange two single life insurance policies rather than one joint policy. Years later, our next advisor told us this was a more costly option and it would be cheaprer to have a single joint policy - after all they would only pay out the once.

Does anyone know if this counts as misselling - or would this have been reasonable given we were unmarried?

Thanks

stephenni1971

Sugardonut wrote: »

Hello

Before my DH and i married, we bought a flat together. Our mortgage advisor at the time arrange two single life insurance policies rather than one joint policy. Years later, our next advisor told us this was a more costly option and it would be cheaprer to have a single joint policy - after all they would only pay out the once.

Does anyone know if this counts as misselling - or would this have been reasonable given we were unmarried?

Thanks

Cost difference between two single and one joint will be minimal - often within 5% of each other or less.

Could be argued as you were not married separate polices gave more flexibility in case circumstances changed - and had you both died both would have paid out - you are insuring yourselves not the mortgage.

dunstonh

Our mortgage advisor at the time arrange two single life insurance policies rather than one joint policy. Years later, our next advisor told us this was a more costly option and it would be cheaprer to have a single joint policy - after all they would only pay out the once.

The joint plans would have paid out twice on joint death. Personally I prefer joint to cover a joint need. However, I have on occasion done single life plans for unmarried couples and it is very easy to justify as the cost is often very little in difference at that age. Especially when you factor in critical illness cover.

I have a client going back to the 90s who still has that life policy running despite splitting up from his partner at that time as he suffered an illness and couldnt get a replacement anywhere near the some cost now.

This is just a different way of doing the same thing and will be beneficial to some and not others. As you were not married, then the single option each is not uncommon.

ACG

I think you would be hard pushed to win a miss selling case.

There was a need for it. There are a number of different ways of selling life insurance...this isnt the cheapest, but you are both fully covered in the event of death.

If one were to die and the other then moves on with their life, they still have life cover in place at the premium it was when you were however many years younger, prior to any medical conditions which may have come along.
If you had a joint life policy and one were to die, the other may still want life insurance. They would then have to most liekly pay a higher premium as they are now older.

Sugardonut

Thanks for the responses, i was under the impression from the second mortgage advisor that the life insurance covered the mortgage repayment only hence my confusion.

Either way, if there is not much cost difference it's eachy peachy.

Thanks again:)

dunstonh

Thanks for the responses, i was under the impression from the second mortgage advisor that the life insurance covered the mortgage repayment only hence my confusion.

Technically it is a decreasing term assurance policy. The fact some now market it with their own product name saying mortgage term assurance (or whatever) doesnt matter. It pays out whether there is a mortgage or not.

Sadly, some advisers see fit to criticise the advice of others to make themselves appear better. it doesnt happen as much as it used to (tied agents were notorious for telling porkies to get you to change your product to them but its mainly just banks and estate agent reps nowadays) but you do see it still sometimes.