Mortgage PPI claim

toothfairybuttkicker

OK so I know from reading some of the treads on here that Mortgage PPI claims are rarely accepted so i'm looking for a little clarity on my case.

Back in 2000 (aged 21 newlywed and pregnant) OH and I applied for a mortgage with our bank and were declined and recommended to an independent mortgage advisor who found us a mortgage and endowment policy with the Derbyshire and Scottish life respectively.

After multiple trips to the Derbyshire offices in crewe ect we finally had our final meeting with the derbyshire people to sign our paperwork. firstly the buildings and contents insurance to sign (no discussion or offer to find it elsewhere)

secondly here's your mortgage insurance sign here then we can get you your mortgage. 'what does it cover?' everything really, death, sickness, unemployment, accidental, it pays your mortgage for you if you need to claim. Just sign here. but what if the mortgage amount changes with the interest rates? don't worry we monitor that for you and make sure you are. Just sign here.

At no point were we asked if we had any pre-existing conditions ect only if we smoked.

roll on 2005 and we needed to free up some equity in our house to replace the roof and it comes to light that we didn't actually have death benefit on the policy (never been sent a copy) and that it needed to be added. So we dutifully fill out all the paperwork and send it off and think that we are now cover incase we snuff it

Wrong - the product has now been handed over to jubilee and under writers have changed. Been sent a lovely little letter telling us and asking us to complete d/d insruction so as not to disrupt our cove. dutifully done and requested a copy of our policy for our records ect

Still no policy just multiple generic leaflets that say if you have product a you get 123, if you have product b you have 123.

Now in a few days I change brackets on insurance forms so I've sat down with an insurance guy to check my bits and low and behold we still don't have death benefit and we the amount we are insured for is way below our mortgage cost and has been since day 1. I've got the letters from them (2005) confirming that the were adding the life/death benefit. Phoned jubilee and told by them that I needed to go back to point of sale.

Insurance guy asked to look through all my mortgage papers and it says that MPPI is optional so he thinks that we could have been pushed into the policy by the fear of not getting the mortgage. (in all honesty he was right I sat through the whole meeting shaking with panic that we weren't going to get the mortgage because of our age, pregnancy ect)

FYI I have a pre-existing condition that has had me in hospital 5 times in the last 4 years. we have never claimed on the insurance as we have always had money coming in as I get full sick benefit at work (another miss selling point I think)

I guess i'm just looking for some advice and possible outcome scenarious. I feel sick thinking that one of use could have passed away and leave the other in a financial mess and three kids to look after.

dunstonh

At no point were we asked if we had any pre-existing conditions ect only if we smoked.

Yet the life assurance application for Scottish Life had questions on your medical history and your smoker status. The illustrations provided would have stated your smoker status as well.

roll on 2005 and we needed to free up some equity in our house to replace the roof and it comes to light that we didn't actually have death benefit on the policy (never been sent a copy) and that it needed to be added. So we dutifully fill out all the paperwork and send it off and think that we are now cover incase we snuff it

The endowment policy is life assurance.

I've sat down with an insurance guy to check my bits and low and behold we still don't have death benefit and we the amount we are insured for is way below our mortgage cost and has been since day 1.

So, where is the endowment policy?

I guess i'm just looking for some advice and possible outcome scenarious. I feel sick thinking that one of use could have passed away and leave the other in a financial mess and three kids to look after.

You do appear confused and perhaps there is a bit of information being given rather than all of it. For example, you say you have no life assurance but the endowment policy would have been the life assurance. So, what has happened to the Scottish Life policy? Did you stop it, is it still running?

If you are looking to make a complaint about MPPI then your biggest issue is that it is pre-regulation. So, the original seller doesnt have to consider any complaint you make and reject it as pre-regulation.

Your comments about not being asked about smoker status and health dont match the fact that you completed an application that asked those very questions. It would suggest you dont remember rather than not being asked.

-taff

And your sick pay may work with loan or CC PPI but has no bearing on mortgage insurance.

toothfairybuttkicker

Thank you for your helpful comments. Endowment policy was set up separately to the mortgage and you've confirmed that with an endowment policy you automatically have life cover so why be forced into an additional MPPI. I understand that the first part was prior to regulation change but the second 'foul up' is post regulation and wondered if it would have any consequence at all. At no point did the building society ask about our health ect. I'd've finally got hold of a full schedule of insurance and it has me registered as a smoker and OH as a non smoker. Again this was and is incorrect. I was not a smoker at the time of signing those documents and OH was!!!

The endowment policy was relinquished in 2003 when it became obvious that it would not accrue the funds necessary to pay off the mortgage. After paying ingot over £4000 it was only worth a fraction and we changed to a repayment mortgage.

dunstonh

Endowment policy was set up separately to the mortgage and you've confirmed that with an endowment policy you automatically have life cover so why be forced into an additional MPPI.

MPPI does not overlap with life assurance. They cover two different things.

I understand that the first part was prior to regulation change but the second 'foul up' is post regulation and wondered if it would have any consequence at all.

The initial sale is pre-regulation. Only if you received advice via an adviser on the second event could you then complain about the advice. If you went direct to provider to make changes then no.

At no point did the building society ask about our health ect.

They are not required to. There is nothing the building society would need to know about your health.

toothfairybuttkicker

Thank you again for your reply.

Yes we did deal with the building society advisor again in 2005. I have all the letters and paperwork from her confirming that the insurance cover was going to now include death/ life benefit, but it seems that this was never completed by her but the payment per month (premium?) was increased!

Health wise, how can a product regarding your health and life be sold to you without being asked for information regarding your health and smoking status. How can the insurance schedule be set and state smoking status if you aren't asked?

dunstonh

can you clarify something. You say in post #1 that it was an independent mortgage adviser that was used. Yet in post #6 you say you dealt with the building society adviser again in 2005. Who did you use?

. I have all the letters and paperwork from her confirming that the insurance cover was going to now include death/ life benefit, but it seems that this was never completed by her but the payment per month (premium?) was increased!

The building society would not use the insurer that the independent would use. They would have their own single provider.

Health wise, how can a product regarding your health and life be sold to you without being asked for information regarding your health and smoking status. How can the insurance schedule be set and state smoking status if you aren't asked?

The endowment policy would have had details of your health. It would have asked smoker status, health questions, GP details etc. More than enough for the adviser to know if MPPI was suitable or not.

How can the insurance schedule be set and state smoking status if you aren't asked?

The insurer doesnt need to know on MPPI. They underwrite it at point of claim. Not point of sale. The adviser needs to know as it is the adviser that has liability for the advice. Remember that with PPI, you are not complaining about the product. You are complaining about the sale or advice.

toothfairybuttkicker

dunstonh wrote: »

can you clarify something. You say in post #1 that it was an independent mortgage adviser that was used. Yet in post #6 you say you dealt with the building society adviser again in 2005. Who did you use?



The building society would not use the insurer that the independent would use. They would have their own single provider.


.

hi yes. we were turned down for a mortgage by Halifax and they directed us to an independent advisor who found the mortgage with Derbyshire and the endowment policy. He made all the arrangements regarding those t10 items and then passed us to the Derbyshire. When we went there to sign the final paperwork we delt with the derbyshire's advisor who promptly got us to sign all the bits of paper for insurance and the mortgage.

When we took additional money against our property in 2005 we went back to the same advisor at the bank who 'did' all the paperwork ect

dunstonh

hi yes. we were turned down for a mortgage by Halifax and they directed us to an independent advisor who found the mortgage with Derbyshire and the endowment policy. He made all the arrangements regarding those t10 items and then passed us to the Derbyshire. When we went there to sign the final paperwork we delt with the derbyshire's advisor who promptly got us to sign all the bits of paper for insurance and the mortgage.

Ok, that changes things a bit as you effectively had two different advisers doing the same thing. The independent would have asked the medical details. The b/soc would not. Strictly speaking, the b/soc should not have sold the insurance if they knew the IFA was dealing with it. However, that is more to do with agreements on introductions.

The building society would also have to consider pre 2005 cases as well (whereas an independent does not). So, that brings the original sale back into play again.

So, looking back at the original sale, you have mentioned the following things:
1 - no discussion or offer to find it elsewhere - That is and never has been a requirement. Not a reason for mis-sale.
2 - At no point were we asked if we had any pre-existing conditions ect only if we smoked. Strangely, MPPI doesnt get priced on smoker status. So, its a question that is rarely asked (although some factfinds will ask it). MPPI doesnt ask for pre-existing conditions as part of the application. This only becomes a mis-sale issue if you actually have pre-existing conditions that would invalidate the ability to claim on the policy. So, the conditions tend to need to be serious and long term.
3 - 2005 sale was started but doesnt appear to have completed. It also appears to be about life assurance. Not MPPI
4- I get full sick benefit at work (another miss selling point I think) - that is not a mis-sale reason with MPPI. FOS has been rejected complaints on that basis with MPPI. However, it is a valid reason for loan and credit card PPI. Reason comes down to length of debt and the seriousness of the consequences due to non payment.

So, pre-existing conditions could be a valid reason. The rest isnt. Any allegation of strong arm tactics is likely to be rejected as you have no evidence of that and they will have nothing to support it either. So, it would then revert to suitability and financial need. Most people have financial need (as if you had the savings, you probably wouldnt have the mortgage - although exceptions do apply). Pre-existing is an issue if the condition was severe enough to make cover void. e.g. a recurring back condition would be a pre-existing condition but would not invalidate the policy. You couldnt claim on back pain in the future but everything else would. However, something that can spread easily to other parts of the body or cause other conditions could prevent a claim.

toothfairybuttkicker

Thank you again. You have been really helpful. I have a genetic disorder that could eventually lead to kidney failure. I have contacted my consultant regarding a letter/report to send to the bank.

I am unfortunately a fool for believing that completing the additional paperwork in 2005 and returning it (postal receipt) ment that it was sorted.

Both OH and I were fools for being tricked into a MPPI policy from Derbyshire back in 1999 and then trusting them to make the alterations in 2005. When re reading the paperwork from 2005 from the same advisor regarding changing to the alternative policy (which I was under the belief that we had as the premium jumped).

I still haven't cancelled the policy as the man on the phone scared me by saying 'what if'

Should I cancel it?

dunstonh

I still haven't cancelled the policy as the man on the phone scared me by saying 'what if'

Should I cancel it?

That is the problem with insurance. It is to cover events which could happen but you dont know if they will or when. You could pay an insurance all your life and never claim and think it was a waste of money. Or you could pay it and suffer a claimable event and get paid out and you think it was the best money you ever spent.

I am not going to tell you what to do there and no-one else will or should. If anyone told you to cancel it and then 6 weeks later you suffered a claimable event and no longer had the policy, that would not ideal (as well as being potentially unsafe on compliance and legal grounds).

What you are best doing is contacting the insurer and making them aware of your medical background and dates (so write it down first before calling so you have a timeline in front of you). Ask them straight out if your medical condition has any impact on the insurance. If no, then you have no grounds for complaint on pre-existing. If yes, then it would depend on the impact. If it is just eliminating claims about kidney disorder then that is not enough. If it would prevent wider claims from being made then it would reduce the suitability of the policy and make it a potential mis-sale.

Make a note of date/time and name of the person you speak to. if they say it has no issue then you have a name, date and time for them to check the call. If they say you are not covered then you have a name, date and time to give on your complaint confirming that you are not covered.