Miss sold insurance policy

angela20_2

Over twenty years ago,we were sold what we thought was a life insurance policy.It was never at no time explained, that it was not a full life insurance policy, but having finally paid our mortgage off. The policy also came to a end. when I questioned it, I was informed that instead of a life insurance policy it was actually what is known as a decreasing term insurance policy which is something I honestly had never heard of . So in reality I have paid £12:00 every month, even when I owed less than what I actually had in the bank for nothing!!!.
Santander/Abbey, said there was nothing they could do about this.

So let this be a warning to everyone dont be as stupid as I have been.:mad:

Slowhand

The policy would have paid off your mortgage had the worst happened. I pay home insurance every year, is that for nothing?

opinions4u

angela20 wrote: »

Over twenty years ago,we were sold what we thought was a life insurance policy.It was never at no time explained, that it was not a full life insurance policy, but having finally paid our mortgage off. The policy also came to a end. when I questioned it, I was informed that instead of a life insurance policy it was actually what is known as a decreasing term insurance policy which is something I honestly had never heard of . So in reality I have paid £12:00 every month, even when I owed less than what I actually had in the bank for nothing!!!.
Santander/Abbey, said there was nothing they could do about this.

So let this be a warning to everyone dont be as stupid as I have been.:mad:

A decreasing term assurance policy is a life assurance policy.

One of it's common purposes is to clear a debt on death. The amount of cover decreases as the loan balance decreases. This keeps the premiums down.

An alternative would have been a level term assurance policy. This would pay out the original amount borrowed, even if the debt had reduced. The premium would be more.

If you were expecting some sort of lump sum (it isn't clear from your post) then an interest only mortgage with an endowment policy may have been more appropriate. But for too many people the lump sum produced by these policies hasn't been enough to fully clear the mortgage in recent years. So many buyers have still been left with debt at the end of the term.

For me it seems you got exactly the right kind of life policy. If you'd had to claim it would have cleared your debt. Enjoy the fact you've not had to claim, you are mortgage free and still have life in front of you.

What exactly were you expecting?

ACG

As opinions4u says Decreasing Term Assurance (DTA) is life insurance. If you die... it pays out (or would have). Its still sold today and it does exactly the same thing.

You can get whole of life cover, but as that is guaranteed to pay out, its usually quite expensive in comparison, this is usually sold for smaller amounts of money - enough to pay for a funeral etc.

dunstonh

.It was never at no time explained, that it was not a full life insurance policy

What do you mean by full life insurance policy? No such term exists.

I was informed that instead of a life insurance policy it was actually what is known as a decreasing term insurance policy which is something I honestly had never heard of .

Decreasing term assurance policies are one of the two most common types available. It is typically used for covering capital & repayment mortgages. From what you say, it is exactly the right sort of policy you should have had for the objective.

So in reality I have paid £12:00 every month, even when I owed less than what I actually had in the bank for nothing!!!.

Are you not happy that you are still alive? It seems strange to be complaining that you havent had to claim on a life assurance policy as it would mean you or your spouse/partner would be dead.

Santander/Abbey, said there was nothing they could do about this.

There isnt as no wrongdoing has taken place.

So let this be a warning to everyone dont be as stupid as I have been.

You havent been stupid. No-one here has been stupid. You appear to be confused.

angela20_2

Thanks for all who answerd