were we missold mortgage life insurance

SaRaH_3

I got my Halifax endownment mge in 90's and had to get the life insurance with it. Im single with no dependants and so I didnt need it then and now. Ive only recently found out via MSE that its not compulsory and so Ive raised a complaint with Halifax. Not sure how it will go and wonder if anyone else here has raised a similar complaint and been successful?

The_J

SaRaH wrote: »

I got my Halifax endownment mge in 90's and had to get the life insurance with it. Im single with no dependants and so I didnt need it then and now. Ive only recently found out via MSE that its not compulsory and so Ive raised a complaint with Halifax. Not sure how it will go and wonder if anyone else here has raised a similar complaint and been successful?

An endowment comes with life cover.

holly_hobby

If a low cost endowment (LCE) was sold to entirely support the interest only mortgage, then the requirement of additional life cover in respect of the mge would not have been necesssary. As the Guaranteed Death Benefit (GDB) under a the policy, mirrors the target amount (the amount borrowed).

If you mean you are not happy that your endowment includes life cover, as a single with no dependants. You need to be aware that you chose to effect an interest only mortgage supported by a low cost endowment policy as a repayment vehicle. Low cost endowments are qualifying contracts (which basically means their returns on maturity or early surrender are tax free) (on early surrender if min term and prems paid have been met).

So the fact that your repayment vehicle (policy) includes life cover, is intergral and provides a beneficial tax advanatage to the contract, and does not mean it was mis-sold or inappropriate, on the sole basis that you were single with no dependants at the time of the sale and did not require the term assurance element within it.

Hope this helps

Holly

SaRaH_3

Thanks, I forgot to mention that I switched from endowment to repayment about 3 years into the mge but the life inurance continued as it was with the endowment. Im sure this changes things?

holly_hobby

No it you continued to, and are continuing to pay the premiums, it doesn't matter.

Re-read the qualifying terms I have discussed, life cover is an intergal part of the qualifying status and prems under your low cost endowment contract, it can not operate without it or be removed, and the policy be maintained.

Were you unhappy with the contract and thats why you ceased to use it as a repayment vehicle 3 yrs in ?

If so, did you lodge any mis-selling complaint re the endowment, esp when the shortfall mess blew up circa 10yrs ago ?

Again if so, what was the Firms response ?


Holly

vectistim

SaRaH wrote: »

Thanks, I forgot to mention that I switched from endowment to repayment about 3 years into the mge but the life inurance continued as it was with the endowment. Im sure this changes things?

You changing the mortgage three years later doesn't alter the circumstances at the time of the sale.
Better savings/investment vehicles would have probably been available at that time.
If you just told the bank you wanted to change from interest only to repayment then they probably wouldn't have asked about your method for repaying the interest only version of the mortgage.

SaRaH_3

Yes I was unhappy with the endowment but didnt know that I could make a complaint about the product. The bottom line is that I thought the life insurance was compulsory and I now know thats not true, I wasnt told this by Halifax but found it out via MSE. That is really the heart of my complaint against Halifax.

holly_hobby

You're rather missing the point ....

Life cover is a compulsory contractual element of a low cost endowment - as its inclusion that permits the proceeds on maturity to be paid tax free.

Whilst standalone life cover may not have been a mandatory requirement for an interest only mortgage, a repayment vehicle would have been .... hence the effecting of a low cost endowment ... and we are starting to go round in circles ..

There is no merit on any complaint re the inclusion of term assurance under the contract. The only point of valid complaint would be if you have complained regarding the SUITABILITY of the contract to your risk profile/attitude to risk and were not aware of any investment risks (and are not time barred in respect of previously issued red letters - which would be quite likely at this point) - with any compensation based only on time that the policy was held as a mge repayment vehicle i.e 3 yrs (which may be little to no compensation not withstading the time barr issue).

The fact you have maintained the contract post converting to C&I, was your choice and has no bearing on the original basis of sale (which was justified, as this was not a future house pch sale) or subsequent change in circumstances.

Hope this helps

Holly

SaRaH_3

The point is that I wasnt informed by Halifax that when I change from endowment to replayment that I no longer had to have mge life insurance. Its simple Halifax didnt tell me and I didnt know and so I continued the mge life insurance which I would have cancelled had I known I could.

Burridge60

You Dont even have to have contents insurance for a mortgage.

No Income Protection.

No Critical Illness.

No Death In Service.

No Pension.

No Mortgage Life Cover.

Just be immortal and of course take out Buildings Insurance as stated by the lender to protect their security.