Legal and General critical illness and life cover

puzler

Hello

Myself and my husband took out our first mortgage in 12 years ago. When we go the mortgage we were pressured in to taking out critical illness cover and also life cover. We were 26 and 24 at the time and we believe that these products were mis-sold. We were advised by an IFA and we have written to Legal & General who have said we need to write to IFA as he provided financial advice on this product and not them. Has anyone else experienced this and if so did they get anywhere with pursuing the IFA ?

Many thanks

Paula

burty8899

i don't think you will get far, from what i have read critical illness and life cover are advisable things to have on something like a mortgage, evan today. there are more knowledgable people on here though so i would se what they say!

dunstonh

When we go the mortgage we were pressured in to taking out critical illness cover and also life cover

Which is common sense for people taking on such a major debt.

We were 26 and 24 at the time and we believe that these products were mis-sold.

How? You havent given any reasons to indicate mis-sale in your post.

We were advised by an IFA and we have written to Legal & General who have said we need to write to IFA as he provided financial advice on this product and not them.

L&G don't have any liability for the advice you were given. The IFA does.

as anyone else experienced this and if so did they get anywhere with pursuing the IFA ?

I would expect the IFA to refuse a complaint statistically. Most of the population insures themselves when taking out a mortgage for very good reason. So, unless you can show you were never going to die or suffer a critical illness or you had no financial need for the products, you dont stand a chance.

The fact you are married shows a financial need. So, even with limited facts available to us, it would be an easy rejection.

There is also the issue that these are pre-regulation (2005).

roonaldo

sorry to ask a horrible question, what would you have done if your husband had died? struggled to pay mortgage on your own? got repossesed?

or would you prefer that you would have been looked after financially?

GeorgeChallis

Hi all,

I've been looking for a similar answer to Puzler's question;

3 -4 years ago Me and my fiance! took a mortgage out with Halifax but through a broker (Mortgage Advice Bureau)

We were advised by the broker that we were REQUIRED to take out MPPI AND Critical Illness cover in order for our mortgage to be accepted.. So we accepted this as fact and duely took the cover out.

We have recently been contacted by the MAB to reshuffle the covers we had to get a better deal. This is when I asked the adviser if the cover we had originally taken was compulsory for our mortgage.. he said no.

My question is.. Were we mis-sold the two policies? And will we have a leg to stand on if we wished to reclaim?

dunstonh

We were advised by the broker that we were REQUIRED to take out MPPI AND Critical Illness cover in order for our mortgage to be accepted.. So we accepted this as fact and duely took the cover out.

Are you sure they said that and it wasnt presented more along the lines that you had to buy the insurance through them to get free mortgage advice? (a very common pricing model for mortgage brokers)

Were we mis-sold the two policies? And will we have a leg to stand on if we wished to reclaim?

You can bet your life they have no evidence to support your allegation. So, what evidence do you have? Even if we assume that you were told incorrectly, it is the hardest of all complaint reasons as it is rare for any evidence to exist to support it.

GeorgeChallis

Thanks for the reply.

So, considering these points. Would we have anything to lose in putting in a claim? As in no harm in trying?

dunstonh

So, considering these points. Would we have anything to lose in putting in a claim? As in no harm in trying?

You burn your bridges with that broker. They may also void/cancel the policies as a complaint saying you didnt want them (which is effectively what you are doing). That may be an issue if you have an old style CI policy with greater coverage than current versions (plus you are older so a replacement may be more expensive).

With the banks it is easy to put in complaints as they are a faceless organisation. With small local firms you are actually putting in a complaint against an individual. They will have to carry that complaint on their file to show any future employer. The firm will also have to declare it to their PI insurer and likely face higher premiums, even if complaint is rejected. So, there can be harm in trying if your complaint is not valid when dealing with small firms. If your complaint is valid then fire away. However, if it isnt then hold your guns.

GeorgeChallis

dunstonh wrote: »

You burn your bridges with that broker. They may also void/cancel the policies as a complaint saying you didnt want them (which is effectively what you are doing).
.

can brokers void a policy even if they arent providing it ? (L&G are the actual insurers)

dunstonh wrote: »

That may be an issue if you have an old style CI policy with greater coverage than current versions (plus you are older so a replacement may be more expensive).
.

when my broker contacted me recently we set up a new, cheaper policy with the same provider. So the old CI policy has now ended.. surely they couldnt void different policies?

The original MPPI is still in place so i am inclined to not pursue this as a claim at the minute.

dunstonh

can brokers void a policy even if they arent providing it ? (L&G are the actual insurers)

If they are agents of L&G (which many brokers are) then yes. I havent checked in this case.

when my broker contacted me recently we set up a new, cheaper policy with the same provider. So the old CI policy has now ended.. surely they couldnt void different policies?

That breaks the chain but the use of L&G again suggests they are not independent as the odds of that are unlikely.

Edit: just checked and it is confirmed that they are tied sales reps of L&G. That also makes the chance of your complaint being successful less as well as you have purchased a replacement indicating you still want it. A strange thing for someone to do if they didnt want it.

For future note, never use tied sales reps of one insurer or a limited panel of insurers. You wont get best advice and the products are typically more expensive than the IFA version (even when using the same brand insurer). I have seen as much as 40% difference in pricing using the IFA version of the product compared to the tied agent priced version.

prioritylife

Hello, You mention that you have been mis-sold, but are you able to explain how you were mis-sold? If you are taking out a mortgage it is usually the responsible thing to protect this huge liability and ultimately your home, if either of you were unable to work or even worse. If you have children at home, the need for protection is much greater. Generally speaking the UK attitude to such protecting differs depending on the age group, 20-30 year olds often think they are invinsible and they will never die or be ill.....vs......50+ year olds who have experienced, often first hand, serious illness.....who are now unable to obtain cover because the premiums are now very high. As with all cover, the best thing to do is seek advise and shop around. Especially with the EU Gender Directive coming into play at the end of 2012 whereby most premiums will increase. Unfortunately, nowadays many people prefer to give themselves advice rather than seek it from a professional. This often results in unwelcome 'surprises' if a claim is made. My company specializes in both 'Advice' and the lowest premiums in the UK. You can check out our website below for an instant quote to compare against other quotes you may have or existing cover. prioritylife.co.uk