MIS-SOLD LIFE ASSURANCE - PLease Help!

kenzie123

Hello,
Wondering if anyone can give me some advice - my parents had a life assuramce assurance policy - it was completely mis-sold to them in my eyes - they didn't know what it was for, they signed up for it, money went out my direct debit over 14 years (£80 a month!) and they were never contacted about it by post / email - the money just kept going out. Then my Dad turned 70 and the policy ended and now thats it.

They were not told the terms and conditions, my Dad says he thought it was covering the mortgage but I'm looking at the Plan Certificate and it says the benefits are ' Death £40,000 single payment' so it wasn't covering the mortgage anyway.

Also - it is on my Mum's name too - but since she is not 70 yet I'm wondering why it doesn't still cover her.

Can anyone please help me? This started as a daughter just looking through some finances and its now turned into this discovery that my parents have been conned and I really don't know what to do. Can we complain about this?

With many thanks in advance

Kenzie123

OshayAway

It would have been explained when they took it out originally. They would have been provided with a quote and application (which they also would have signed in most cases) they would have also have received the policy documents clearly showing the details including sum assured and term length.

As it was a joint term assurance policy, it was likely at the time when non-investment plans had to cease before the oldest plan holder's 70th birthday.

Had one of them died, a claim would pay out so there are no grounds for mis selling.

dunstonh

they didn't know what it was for, they signed up for it

how do you know that and how can you prove it?

money went out my direct debit over 14 years (£80 a month!) and they were never contacted about it by post / email - the money just kept going out.

Everything done correctly there then. You dont get contacted again as there is no need to.

Then my Dad turned 70 and the policy ended and now thats it.

Excellent. It means your dad hasn't died. Something to be happy about.

They were not told the terms and conditions

Yes they were. They would have been issued a key features document and a policy document and a policy schedule. However, it is life assurance. It is pretty easy to suss out as you are either alive or you are dead. No wishy washy in betweens there.

my Dad says he thought it was covering the mortgage but I'm looking at the Plan Certificate and it says the benefits are ' Death £40,000 single payment' so it wasn't covering the mortgage anyway.

Was the mortgage more than £40,000?

Also - it is on my Mum's name too - but since she is not 70 yet I'm wondering why it doesn't still cover her.

Because the age would have been specified at the start. Probably limited to age 70 of the eldest application as was the norm at the time.

Can anyone please help me? This started as a daughter just looking through some finances and its now turned into this discovery that my parents have been conned and I really don't know what to do. Can we complain about this?

So far you have given nothing to suggest anyone was conned or that any wrong doing has taken place. I suspect there this is more to do with a lack of understanding on your part rather than a wrong doing as it is pretty hard to mis-sell life assurance. Especially to a married couple.

kenzie123

dunstonh - thank you for your response.
While all of your points are helpful and no doubt informed, your tone is slightly patronising. Surely in your job as an Independent Financial Advisor, you deal with people who are not completely clued up on these matters. I wholly admit I am not, which is why I came on here.

Thank you for pointing out the good news my father hasn't died. That may have been a way of sounding humorous, but in all honesty I found it slightly insensitive.

Completely appreciate your feedback though and will take all that you've said on board. I do not doubt that your statements are based on a thorough knowledge of these matters and I thank you for your time.

This policy was sold through a broker at the time my parents got a mortgage. They were told without a policy such as this one, they would be unable to get the mortgage. While I am no expert on these things, I am still unconvinced that they were not mis-sold this particular policy, and this surely wasn't a completely altruistic act from the broker or insurance company. I will investigate further.

Best wishes

kenzie123

OshayAway - thank you very much for your response.
Apparently a broker arranged this for my father, and no policy documents were shown to him at the time. He signed this believing that a) it would cover his mortgage in the event of his death and b) he wouldn't get the mortgage in the first place if he didn't have this cover.
Do you think this changes anything with regards to the mis-selling of the policy?
Would appreciate any feedback.
With best wishes

dunstonh

While all of your points are helpful and no doubt informed, your tone is slightly patronising.

With text, short and to the point answers can appear that way but its not the intention. Better too say things in short understandable statements than long wishy washy paragraphs that tell you nothing. You may not like what you hear but it will be to the point and understandable. Getting answers which agree with you when you are wrong but give you comfort dont help.

Thank you for pointing out the good news my father hasn't died. That may have been a way of sounding humorous, but in all honesty I found it slightly insensitive.

That appears to be your issue though. The fact your dad hasnt died and therefore the policy never paid out. Insurance covers things that may happen. If the events dont happen and you dont claim on it then you dont get a pay out but you get the peace of mind that had it happened, it would have paid out.

This policy was sold through a broker at the time my parents got a mortgage. They were told without a policy such as this one, they would be unable to get the mortgage. While I am no expert on these things, I am still unconvinced that they were not mis-sold this particular policy, and this surely wasn't a completely altruistic act from the broker or insurance company. I will investigate further.

Life assurance is simple. If someone is worse off in the event of your death then you need life assurance. Most married couples need life assurance to replace lost income, lost pension entitlement, cover debts etc.

Apparently a broker arranged this for my father, and no policy documents were shown to him at the time.

They wouldnt be. They arrive in the post with the policy schedule.

He signed this believing that a) it would cover his mortgage in the event of his death and b) he wouldn't get the mortgage in the first place if he didn't have this cover.
Do you think this changes anything with regards to the mis-selling of the policy?

a) is there any reason to think why it would not have covered the mortgage?
b) many brokers require the purchase of insurance to enable them to give free mortgage advice. That is allowed. Even if that was not the case here, you have two issues. 1) you cant prove it as it is an unprovable allegation and 2) it is prior to regulation and the broker wont have to consider any complaint (insurance became regulated in 2005 for sales that occurred after that point. A few exceptions apply - such as using an agent of an insurer but most brokers did not become regulated until 2005)

OshayAway

kenzie123 wrote: »

OshayAway - thank you very much for your response.
Apparently a broker arranged this for my father, and no policy documents were shown to him at the time. He signed this believing that a) it would cover his mortgage in the event of his death and b) he wouldn't get the mortgage in the first place if he didn't have this cover.
Do you think this changes anything with regards to the mis-selling of the policy?
Would appreciate any feedback.
With best wishes

The policy documents are normally sent directly to the life assured from the insurer as the contract is between the insurer and policy holder.

All of dunstonh's points and answers are valid and correct.

kenzie123

dunstonh wrote: »

With text, short and to the point answers can appear that way but its not the intention. Better too say things in short understandable statements than long wishy washy paragraphs that tell you nothing. You may not like what you here but it will be to the point and understandable. Getting answers which agree with you when you are wrong but give you comfort dont help.

Thank you Dunstonh.
Honestly I am appreciative of this feedback - it's just a difficult situation to accept. I am not seeking comfort - however I do feel that this situation is unfair. And in a similar vein to the recent PPI claims scandals - would this not be deemed as a similar situation - whereby a broker and an insurance company profit like this? I may be naive but am I wrong in questioning an amount of £80 a month over 14 years?



That appears to be your issue though. The fact your dad hasnt died and therefore the policy never paid out. Insurance covers things that may happen. If the events dont happen and you dont claim on it then you dont get a pay out but you get the peace of mind that had it happened, it would have paid out.

It was my issue. As I said, your knowledge on this subject matter in unquestionable compared to mine but it was just your wording that I took issue with, and bearing in mind this situation is personal to me. However, this is now irrelevant and understand you don't intend to offend.

Life assurance is simple. If someone is worse off in the event of your death then you need life assurance. Most married couples need life assurance to replace lost income, lost pension entitlement, cover debts etc.



They wouldnt be. They arrive in the post with the policy schedule.

I think this has been a matter of trust in a broker who told my parents that this policy was the best way to go. Is it usual practice to sign documents of this nature without seeing the policy first? As far as I understand, the broker was the only contact with my Dad, therefore verbally told him he needed this policy and it was signed for. Is it too late to do anything?


a) is there any reason to think why it would not have covered the mortgage?

Had the worst happened within the first year of this policy being taken out, then no, the £40,000 payout wouldn't have been enough to cover the mortgage.


b) many brokers require the purchase of insurance to enable them to give free mortgage advice. That is allowed. Even if that was not the case here, you have two issues. 1) you cant prove it as it is an unprovable allegation and 2) it is prior to regulation and the broker wont have to consider any complaint (insurance became regulated in 2005 for sales that occurred after that point. A few exceptions apply - such as using an agent of an insurer but most brokers did not become regulated until 2005)

While it is unprovable - the fact is, it happened. I don't know much about this stuff, that may be apparent. What I do know is that my parents seem to have been taken advantage of here. They are not experts either - but surely this still doesn't make it okay? Is Martin Lewis himself not the main reason issues like this are discussed openly - where regular people are sold plans and policies that are unfair and ridiculously high? I am sure if someone had told my parents about other options this could have been at least a lower amount of money.

Is 'unfair' a good enough reason to complain? The point is, as customers, I feel that my parents have been treated unfairly. Do I have a valid point at all in your opinion?

ess0two

Whats the issue?

They paid to much?

Its done exactly what its supposed to do,an assurance against death which thankfully has'nt been needed.

Bit like car insurance its a pain paying extortionate amounts with no return.

ACG

Not really, the time to complain was anytime over the last 14 years.

You cant now complain that you think it was unfair, would you have said the same thing had it paid out?

I think some lenders also used to insist on lifeinsurance being in place - but that was before my time as an advisor.

Also Martin Lewis to some extend has created more harm than good. PPI, whilst i never sold it i have seen people make claims on it - Martin has built up a big hype making it seem like all policies were miss sold.

Had either of your parents passed away during that period, would the remaining parent have been able to live their lifestyle without any financial problems? Would the £40k have come in useful and helped to keep a roof over their head?

You need to look at this from both angles - there was most likely a need, that need was addressed - therefore unlikely to be miss sold.

dunstonh

Honestly I am appreciative of this feedback - it's just a difficult situation to accept. I am not seeking comfort - however I do feel that this situation is unfair. And in a similar vein to the recent PPI claims scandals - would this not be deemed as a similar situation - whereby a broker and an insurance company profit like this? I may be naive but am I wrong in questioning an amount of £80 a month over 14 years?

It is not similar. At least not on what you have said before. PPI was mostly sold by non-advisers. Indeed, the FOS published figures for 2011/12 show just 0.2% of PPI complaints are advised. The FSCS only upheld 5% of complaints against mortgage advisers.

For a mis-sale complaint to work you need to show a wrongdoing and it needs to be after regulation started. This is pre-regulation so it fails in that respect but even if it wasnt, you havent indicated any wrong doing.

I think this has been a matter of trust in a broker who told my parents that this policy was the best way to go. Is it usual practice to sign documents of this nature without seeing the policy first? As far as I understand, the broker was the only contact with my Dad, therefore verbally told him he needed this policy and it was signed for. Is it too late to do anything?

For the time of taking it out it was normal for an illustration of benefits to be issued (single page of A4 in many cases) which just showed the monthly premium, the sum assured (the amount paid out on death) and the term of the policy which will either be stated in years or to an age. A key features document would have been supplied which is usually another 3 pages of misc details. An application (paper based back then) would be completed and sent to the insurer. Once accepted by the insurer, they would re-issue the illustration along with the cancellation rights. Then shortly after that the policy document/schedule would arrive.

From what you have said, it does sound like your parents needed the policy. (married couple with mortgage being key).

Had the worst happened within the first year of this policy being taken out, then no, the £40,000 payout wouldn't have been enough to cover the mortgage.

That is not good but it is potentially justifiable. If your parents could not afford the monthly premium to cover the whole mortgage then taking on a reduced amount is considered better than doing nothing. That could be the case as a level term assurance was used instead of decreasing and a flat premium of an exact rounded figure.

While it is unprovable - the fact is, it happened.

Even if it was post regulation, there would need to be evidence to support the allegations for them to succeed.

What I do know is that my parents seem to have been taken advantage of here.

As of yet, I dont see that they have. We are working on limited info but as of yet you have shown no wrong doing. Lets say your Dad had died and there was no life cover. Your mum would be left with the lost income and the debts. That would be awful.

Is Martin Lewis himself not the main reason issues like this are discussed openly - where regular people are sold plans and policies that are unfair and ridiculously high?

Statistically, very few life assurance policies are mis-sold. The policy doesnt sound unfair and the premium does not sound unreasonable.

I am sure if someone had told my parents about other options this could have been at least a lower amount of money.

Not something that can be complained about though.

Is 'unfair' a good enough reason to complain? The point is, as customers, I feel that my parents have been treated unfairly. Do I have a valid point at all in your opinion?

Insurance was not regulated until 2005. This was taken out before then. So, your parents have no access to the ombudsman service and the seller of the policy does not have to consider the complaint.

However, it still comes back to the fact that you havent identified any wrongdoing. So, even if they could complain, there is nothing so far that appears to have been done wrong.

BTW, if you want to quote, you can copy and paste the text you are responding to, highlight it in the reply box by holding your left mouse button over it and then pressing the speech icon. This puts a quote box at the start and end of the bit you want to quote. You may find that easier.