Morgage & Life insurance advice required

pansies

When I took out a mortgage with Barclays Bank it said on my mortgage agreement that I had to have Barclays Lifestages assurance for myself & my husband this includes critical illness cover. The insurance was originally with Barclays Bank then sold onto Reassure. We were told that once the mortgage was paid we would get a lump sum now we are told that we don't get anything once the mortgage is paid in full
Was this policy mis sold to us?

dunstonh

When I took out a mortgage with Barclays Bank it said on my mortgage agreement that I had to have Barclays Lifestages assurance for myself & my husband this includes critical illness cover.

That sounds like a very old clause as banks havent insisted on that since the mid 90s.

We were told that once the mortgage was paid we would get a lump sum now we are told that we don't get anything once the mortgage is paid in full

Is the policy of a type that builds up an investment value? i.e. have you received statements each year telling you how much it is worth?

Was this policy mis sold to us?

being told one thing but having something different is a mis-sale. However, what you describe doesnt sound like a mis-sale. It sounds like confusion. The reason I say it doesnt sound like a mis-sale as the type of policy that would pay a value would be used to repay the mortgage (or leave you with a shortfall as so many turned out in the latter years). It would not pay a lump sum after your mortgage was repaid. Such a product does not exist.

Life assurance policies that have now value but a pure insurance/assurance are about 10-20 times per month cheaper than the equivalent that paid out a value on maturity. So, how much were you paying each month?

pansies

This was taken out with my mortgage in 1994.

Last statement I had was February 2013 that say the units value was approximately £1,450.

Our mortgage is a repayment type so an endowment type life insurance policy was not required.
We have been paying £43.00 per month for the life insurance since 2009

dunstonh

This was taken out with my mortgage in 1994.

So, is typical of the period when banks could still insist on their own product. So, no issue there.

It does look like you have got what you wanted. The bank required a life policy (whcih they could do) and that is what you got. If you no longer want it you can now cease and surrender it and get a payout of approx £1450.

pansies

If I cancelled my current life insurance with my bank could they insist that I still take out a life insurance policy?

dunstonh

pansies wrote: »

If I cancelled my current life insurance with my bank could they insist that I still take out a life insurance policy?

The rules still allow for the lender to insist on insurance if they wish to make it a condition of lending. You dont see it much with life assurance nowadays in the personal sector but it is still quite common in the business sector.