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Really confused.Life insurance.Please help!

frozenplanet
frozenplanet Posts: 3 Newbie
edited 7 August 2012 at 12:15PM in Mortgages & endowments
We had a meeting with the mortgage advisor from our Building Society yesterday. All was going swimmingly until she brough up life insurance (which my husband has through a work scheme) then the tone of the conversation turned to pretty patronising and rude. Saying that we probalby didn't have enough cover etc etc.

We were all set to go ahead with the application but backed out of there as quickly as our little feet would carry us.
We left not knowing, despite asking twice whether life insurance was necessary.

To cut a long story short, our Key Facts Document states that the only mandatory insurance is Buildings. Despite this I still wanted to clarify with the advisor, since we had left her office with the impression that it is mandatory - and sent her a couple of questions to ask about it.

There are the questions that we sent
- Could you confirm for us whether we have to take out life insurance as one of the conditions of the mortgage that we discussed?
- If so, what is the level of life insurance that the conditions mandate? And also are we free to make our own lifeinsurance arrangements? (as my husband would still prefer to extend his workscheme)
- If not a condition, is having life insurance or not, something that may affect the success of our application?
- Again, if so, what level is required? And are we free to make our own arrangements for this?


The short, sharp response that we received said that life cover was required as a minim and she would like to assess our policies to see if they were suitable.

Again I replied saying that I was confused by this as key facts document says building insurance was all that was required and could she give us some guidance on acceptible levels of life insurance as we'd like to set wheels in motion extanding cover via my husband's work scheme if necessry.

We got a one liner in response, saying that she believes it on the actual Mortgage offer.





Can anyone explain to me why the key facts document would differ from the actual offer?

and what sort of levels of life insurance we need to be looking at?

It seems to us that she could look at any policy that we had and deem it not suitable..and is not willing to give any guidance on what is suitable.

We want to proceed with our building society who we've banked with for many years, but do not really want to have any further discussion about life insurance as we are struggling to get any real clarity about it from her.

Many thanks in advance

Comments

  • harvey115
    harvey115 Posts: 691 Forumite
    The Key Fact Document should not differ from the what you are applying for and its conditions. The Key Facts document should have been provided as part of applying in full.

    However it is correct that Life Insurance cover is not a requirement to take out a mortgage, unless it is specifically been forced due to personal circumstances.

    I think the branch advisor is naive and you should possibly speak to the branch manager and complain about this issue.
  • Dave_Ham
    Dave_Ham Posts: 6,045 Forumite
    Tenth Anniversary Combo Breaker
    I always love this part of the game; I am going to guess it was Leeds ??

    Sensible head on, you absolutely do not need to take their cover or anyones. Most work based schemes will be cheaper for you, does not hurt to check this but usually the case.

    I would suggest you just tell the advisor the truth; we know we do not have to take your life cover or for you to know and happy for you to include this in your reports/letters.

    If you do continue to push us on this we will have to take our entire application elsewhere..


    Good luck
    I am a Mortgage Broker
    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it.
    This signature is here as I follow MSE's Mortgage Adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • bigadaj
    bigadaj Posts: 11,531 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper
    Assume this is a commission issue, if you have sufficient life cover through work then no need for additional. Statistics seem to show that criticial illness and possibly unemployment cover may be mroe valuable to the average buyer, as the probability of a claim is far higher, again depends on what cover you have elsewhere.
  • frozenplanet
    frozenplanet Posts: 3 Newbie
    edited 7 August 2012 at 12:50PM
    bigadaj wrote: »
    Assume this is a commission issue, if you have sufficient life cover through work then no need for additional. Statistics seem to show that criticial illness and possibly unemployment cover may be mroe valuable to the average buyer, as the probability of a claim is far higher, again depends on what cover you have elsewhere.

    This is what I has assumed, however I've been surprised at her willingness to state in an email that it it required, so wondering if she was either genuinely confused, or right.

    We have critical illness, though not unemployment cover - and I agree this makes more sense. We also have a small house that we own outright, that was valued at the amount that we will be borrowing, though realistically would sell quickly at 2/3 that and we'd be prepared to do that if necessary. So I feel we are in a pretty safe situation. Eta current plan is to rent theome we now live in and pay the mortgage off more quickly and ensurevwe have plenty of breathong room
  • dunstonh
    dunstonh Posts: 117,932 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    then the tone of the conversation turned to pretty patronising and rude. Saying that we probalby didn't have enough cover etc etc.

    It is extremely rare to find someone that does have enough cover.

    Never buy your insurances from a bank. Expensive and sales driven. Use a local independent (IFA or independent mortgage adviser). You will save money that way as well as avoiding sales pressure. (although dont mistake an analysis of your financial needs by telling you what your need as being sales. Advisers are required to tell you what your needs are even if you choose to do less).
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Not Leeds, not sure its ok to name names though.

    Thanks very much for the advice.

    Another question...I've gone in gently gently about this as didnt want to get her back up, after all, we need her help. How much does the say on whether our application is accepted rely on the advisor.
    Dave_Ham wrote: »
    I always love this part of the game; I am going to guess it was Leeds ??

    Sensible head on, you absolutely do not need to take their cover or anyones. Most work based schemes will be cheaper for you, does not hurt to check this but usually the case.

    I would suggest you just tell the advisor the truth; we know we do not have to take your life cover or for you to know and happy for you to include this in your reports/letters.

    If you do continue to push us on this we will have to take our entire application elsewhere..


    Good luck
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    edited 7 August 2012 at 2:24PM
    Not Leeds, not sure its ok to name names though.
    Name the firm. Not the individual or location.
    Another question...I've gone in gently gently about this as didnt want to get her back up, after all, we need her help. How much does the say on whether our application is accepted rely on the advisor.
    Usually very little.

    She will be paid more if she sells more.

    A mortgage with no life cover will almost certainly be worth more to her in bonus than no mortgage at all.

    For what it's worth, I would complain to a manager. Equally, I would make sure I got independent advice (IFA) for life cover and other protection needs.
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