Is "Level Term Assurance" PPI?

markymedic

Dear all,

My wife took out a professional studies loan for £Lots in about 2002 and was "required" to take out this policy. No details were given about terms & conditions, premiums, term of the policy, etc. No copy of the paperwork was given to us.

When we contacted HSBC (last year) about possibly mis-sold PPI, we were told they had no record of any such policy. Now we have received a letter explaining changes to the premiums for our "Level Term Assurance with Critical Illness Benefit."

Is this a form of PPI? As I said, we were told there was no option but to take this cover, although we did not want it.

Is there a claim to be had here?

Kind regards

dunstonh

Is "Level Term Assurance" PPI?

No. Totally different product and class. No overlap anywhere. About as much in common as house insurance.

My wife took out a professional studies loan for £Lots in about 2002 and was "required" to take out this policy. No details were given about terms & conditions, premiums, term of the policy, etc. No copy of the paperwork was given to us.

I'm afraid that is not true as what you say there is not possible.

Is there a claim to be had here?

No.

_Andy_

Presumably had one of you died and it paid the mortgage off, you wouldn't be looking to 'reclaim' it

markymedic

Thanks for responses.

dunstonh: Sorry I've missed something. What is not true / possible? I have only said what we were told, i.e. that we were required to take out this policy in order to get the loan.

_Andy_: We did not have a mortgage at the time and we already had life insurance, so it was an unnecessary policy. I only ask about a claim on this basis.

Are there no rules about mis-selling of life insurance?

Regards

DrSqueeze

I'd say step one here is to check what you're actually paying for.

You say you have no policy document or other paperwork. So contact whoever sent the letter about changes to your premiums and ask for a copy.

Then study it carefully to see who is covered, for how much and since when. You mention that you already had life assurance, could this in fact be that policy?

dunstonh

dunstonh: Sorry I've missed something. What is not true / possible? I have only said what we were told, i.e. that we were required to take out this policy in order to get the loan.

An illustration is issued a point of sale. This shows the amount, sum assured and term and covers what it pays out on (which for life assurance is fairly simple and why life assurance illustrations are short). A copy of this is sent to you direct from the insurer with the cancellation rights. Then when the policy starts, a policy document is sent out as well. So, you have three different points at which the terms are issued from two different sources.

You said nothing was received. That would be unrealistic given it is issued 3 times by 2 different sources.

Are there no rules about mis-selling of life insurance?

Any product can be mis-sold. However, there are no mis-selling rules.

Your allegation is an unprovable one. It lacks credibility on the documentation front. So, it would be viewed on a financial need basis. If you had no financial need for the policy then a complaint would likely be upheld. If you did have a financial need for the policy then it would likely be rejected.

markymedic

Thanks DrSqueeze.

We will, of course, have to contact them for details. At the time we sat down with the bank manager, signed a few bits of paper and went away with account information for the loan, but no policy documents for the assurance.

The loan was taken out solely in my wife's name (this was before we were married), she had a separate and pre-existing life insurance policy through a different organisation. I was present when meeting the bank manager, as an interested party, but was not otherwise involved in the loan or the insurance.

I believe the intention of the insurance was to protect the bank if my wife were unable to pay back the loan in the event of death or serious illness. I don't think the cover extended beyond that.

I think maybe I was not clear in my original post, I was really wondering if being forced to buy insurance (that was to protect the bank really, not my wife) constituted a similar situation to PPI mis-selling.

Maybe the easiest thing is just to stop paying the premiums, now that we have evidence of the policy.

Thanks again.

markymedic

Thanks dunstonh.

I am certain that we did not receive any copies of the policy, though I will try to jog my wife's memory to see if she signed anything at a later date. However, she tells me she only signed whilst in the bank manager's office.

We will ask for copies of the policy. Given her pre-existing life insurance I think we could argue that there was no financial need, but I think it may be simpler to just stop paying the premiums. We now have a plethora of insurance and income protection policies, that we have set up independently, that will cover just about anything.

I really just wanted to know if this had been mis-sold. It sounds unlikely based on the responses here, but if I didn't ask I wouldn't know.

Thanks again.

dunstonh

I think maybe I was not clear in my original post, I was really wondering if being forced to buy insurance (that was to protect the bank really, not my wife) constituted a similar situation to PPI mis-selling.

No. Lenders are allowed to insist on insurance in support of a loan. That isnt what the PPI issue is about. Where it is a requirement, it is not a mis-sale.

aybe the easiest thing is just to stop paying the premiums, now that we have evidence of the policy.

If the policy was sold to match the loan then the term and sum assured should match the loan. (although minimum premium restraints can see a higher sum assured. e.g. £10 minimum premium could produce a higher sum assured - that is allowed). Maybe you should check the terms first before cancelling.

We will ask for copies of the policy. Given her pre-existing life insurance I think we could argue that there was no financial need, but I think it may be simpler to just stop paying the premiums. We now have a plethora of insurance and income protection policies, that we have set up independently, that will cover just about anything.

It is rare for someone to have sufficient life assurance. A really dirty guide is all debts covered an 10x annual income. If you have more than that then you may have scope on a complaint. If less than that then you wouldnt expect success.

markymedic

Thanks again dunstonh, sensible advice.

I (clearly) don't understand all this financial stuff, which is why we have IFA's! I accept that this policy was probably not mis-sold, but can you clarify your statement for me:

dunstonh wrote: »

No. Lenders are allowed to insist on insurance in support of a loan... Where it is a requirement, it is not a mis-sale.

How can insurance be a requirement if lenders cannot insist upon it?

dunstonh

markymedic wrote: »

Thanks again dunstonh, sensible advice.

I (clearly) don't understand all this financial stuff, which is why we have IFA's! I accept that this policy was probably not mis-sold, but can you clarify your statement for me:



How can insurance be a requirement if lenders cannot insist upon it?

Lenders are allowed to insist on insurance as part of a deal to lend. Nowadays it is mainly only on business banking clients where you see it. Sometimes the odd deal appears where you get special terms if you buy an insurance policy. These are allowed.