Help! Has my elderly mother been mis sold mortgage insurance?

holly_hobby

Hi there,

Bit late to the party here, but can see its certainly been in full swing !!

My observations are this ...

1. Nationwide don't understand that the complaint is not about the actual sale of the policy (which is why they are referring to the L&G for whom they acted as appointed reps), but that the issues are POST sale customer service .... 2 different things

2. My understanding is .... Mum effected a repayment mortgage (ie a mge where by the balance reduces over time, as she makes repayments), alongside which she purchased a decreasing term assurance (DTA) - which is simply a life policy with a reducing sum assured, to run alongside the reducing balance of the mortgage.

3. Mum was lucky enough to be in a position to repay her mortgage earlier than planed, and accordingly asked a Nationwide adviser (was this a mortgage/ finanical adviser or a desk clerk ?), what she should do about the life assurance supporting her mortgage.

4. She was told by the individual (despite it apparently being a DTA and no longer supporting a mortgage), to maintain it. This on its own doesn't equate to inappropriate advice, BUT it would depend on several factors relating to Mums circumstances, requirements and financial situation - and what should have happened is the Nationwide individual should have advised her to seek independent advice on the matter OR invite her in for a financial review appointment with their in house financial adviser, specifically with regards to the benefits of retaining the policy or not.

Indeed advising her to cancel without such an appointment, is construed as financial advice, and certainly if this had been done WITHOUT a financial review (with later issues arising as a result of it), there would be serious hell to pay with the FSA.

5. However, despite no advice being given by NW to Mum to cancel the policy, I would possibly consider an argument that IF Nwide failed to instruct your Mum to seek advice, as to the ongong suitability of the contract whether to continue or cancel (but instead as we know they simply told her to maintain regardless of any evaluation) , they were essentially failing in their duty of care to their Client (of which Mum is/was both mortgage and life business).

Now of course it may be argued by Nwide that it would be reasonable for an individual to also seek independent advice regarding their protection portfolio (whether they actually advised Mum to do so or not), BUT the fact that they gave ANY advice to Mum re maintenance of the DTA, means that they chose to get involved in guidance without knowledge of suitablity (which is NOT the same as insurable interst as mentioned earlier).

So thats my take on this, you may want to constuct a complaint letter to Nwide along these lines, with resolution being cancellation of the policy, plus a refund of prems paid since mortgage end to date & interest. If NWide reject your complaint (which they may) Mum has the option to refer the matter to the Financial Ombudsman Service (FOS) for further arbitration.

NB - IF the policy is however a level term assurance then my above comments would change considerably - but I'm assuming for the moment its a DTA until you say otherwise.

Hope this helps

Holly

luci

Thanks for the detailed reply. I am replying out of courtesy and don't wish to take the thread any further off topic.

2sides2everystory wrote: »

Some may even exclude completely any claim covered by another insurance thereby not even accepting what otherwise might be considered "their fair share".

I checked both policies recently. One doesn't have such a clause and the other states that is won't pay if the incident is "more specifically covered elsewhere", eg baggage on a contents policy.

2sides2everystory wrote: »

[*]The other way is to contact the insurer you expect to pay before the claim happens and see if you can get advice in writing - that is probably a minefield because typically what happens now is that you have a conversation with someone who reassures you and then they write something completely ambiguous or even opposite to what they told you.
[/LIST]
Good luck!

I got answers to my questions in writing when I took out the policy almost a year ago, one of which was

You do not need to declare any medical conditions for the people travelling nor for people who are not travelling.

2sides2everystory

Hi luci

It looks like you've pretty much cracked it especially with the no pre-existing conditions response letter you obtained which is beautifully unambiguous. The only other caution I would make is that even someone with an insurance background has to be careful when analysing modern wordings to make sure that they don't take the first answer they think they have found because the full extent of the exclusions and conditions can only be understood by mixing the interpretation from what appears in two or three different places in the actual policy document.

The other thing, and you sound far too on the ball for this to have got past you) is that far too often these days you may find you are holding or reading something which appears like it probably is THE policy document but which in fact is something that looks like it, Key Facts Summary or something else, but which isn't the full monty!

Anyway, well done for seeing the wood through the trees and pinning it down. Thousands never get close!


And a special thank you to Holly for an especially clear and unambiguous analysis on the original thread topic. Now let's see if the broad thrust of that gets challenged.

jonesMUFCforever

I repeat she has a life policy - which if she continues to pay will pay out according to the policy terms should she not make it to the end of the policy term.
You are over complicating the issue.
Either she needs/wants the cover or she does not.
If not cancel the policy.

2sides2everystory

And you too are inexplicably obfuscating the stink of financial services misselling, jonesMUFCforever. I can't remember if you rely on the industry for a living? You seem brainwashed.

You seem conveniently to be content to accept that the term mis-selling can only refer to a single point in time when a single item forming part of an advice package was originally sold.

You also conveniently overlook the continuing duties of Nationwide in caring for their client on the journey they experience whilst in possession of all or some of Nationwide sold products.

Who cares if the policy "will pay out"???? No one knows what it will pay out or for what purpose it is still in force or for how long. What public good are you doing coming here and making a post like yours?

Other than cancel now and cut your losses, all you are promulgating is a message that caveat emptor rules (it doesn't), and thankfully the law has moved on a great deal to protect us from thinkers like you.

The OP's mother is almost certainly due at least a return of the premiums since 2004 plus interest. Why have you dismissed that suggestion?

jonesMUFCforever

In that case WRITE a letter to the insurance company quoting the policy number and holder name requesting what the policy is covered for - get your mother to sign it.
That will answer the crucial question.

As far as I can see there is no miss-sale here the policy was in place to cover a mortgage- your mum paid off the mortgage early-she was given a choice of cancelling or having the policy as a pure life policy.

Why should she be refunded any premiums when the policy has been on risk all this time.
The only caveat I would add is this - if she asked for the policy to be cancelled and it hasn't then you might have a very weak case but you would need to explain that you failed to notice a monthly d/d going out of your account for 8 odd years!

Again in my opinion there is no miss-sale here at all but there is plenty of interference from siblings talking through parts of the body best sat on.

rs65

Sounds to me like she was sold the correct cover in 1998.

She was given advice in 2004 that the policy would continue to provide life cover despite mortgage being paid off – she chose to continue cover.

2 options then:-
1. Nationwide were correct and she has had life cover since
2. Nationwide misadvised her, as it was dependent on a mortgage being in place.

She was not mis-sold anything. If option 2 is correct, I would be asking for a refund of premiums paid since as the policy would not have paid.

Does she have any evidence of the advice she was given in 2004?

opinions4u

Decreasing term assurance policy sold to cover a mortgage with a decreasing debt. So probably not mis-sold.

Did the Nationwide staff member recommend keeping the policy? Which would constitute advice.

Or did they give factually correct information that one option is to keep the policy going for the life cover? Not advice. In territory I'd suggest they keep well clear of, but not advice.

"Do I need to cancel the policy now?" ... "You can do. Alternatively you could keep the policy going and have the benefit of the life cover".

I don't think a complaint will stack up. Unlikely to be a record of the conversation. Customer has had the protection provided by the policy, knowing why they are still paying the premium.

2sides2everystory

The Ten "You Cannots" Abraham Lincoln Did Not Say ... apparently (I've not seen the movie yet so I can't say for sure )

opinions4u

2sides2everystory wrote: »

The Ten "You Cannots" Abraham Lincoln Did Not Say ... apparently (I've not seen the movie yet so I can't say for sure )

I have been made aware that old Abe was wrongly attributed those words.

But they still stack up.