Mis-sold Life Insurance?

oneconfusedgirl

Mis-sold Life Insurance

Hi, I hope I'm posting in the right place. 1st post so please bear with me. I'm hoping to get some guidance on whether my partner was mis-sold life insurance.

We are both still living with our parents but are currently going over our finances together to see where we stand on moving in together.

I've discovered that my partner took out life insurance when he was 23 years old (which he is still paying for monthly). Again, at that time, he was living with parents and had no children. So I asked out of curiosity what made him think of taking out life insurance. He seems to recall it was at the same time as applying or a loan, when it was suggested to him.

He can't remember if it was a condition of the loan at the time, but the loan in question (which we are currently trying to get more information on) was for approximately £5000, and he isn't sure if he took PPI on it as well (as I said, were in the process of finding out).

I know there's a lot of information I'm unable to confirm at this time. But could it be considered that he was mis-sold life insurance on the basis of it not being needed (no dependants, no mortgage, living at home with parents), even if we discover there was no PPI on the loan? Or is a £5000 loan enough of a reason to recommend life insurance when living at home with parents?

I've not had a loan before, so I'm unsure what happens to loan debt in the event of a death when you live at home with parents; I.e. If that debt would be passed to parents if no life/PPI insurance is in place?

When I did a google search on life insurance, I found this on FOS website:

the consumer did not need life assurance at all:
"Where a consumer says that they did not need life assurance at all, we will consider their personal and financial circumstances at the time they took the policy out. We would be likely to uphold a complaint where the consumer was young, single and living at home with no dependants. This is because the main reason for having life assurance is to protect someone other than the consumer from being financially disadvantaged by their death. If no one is going to be financially disadvantaged, we will look at whether there was another reason for having life assurance".

I'm not fishing for a claim here, just never known anyone in our position (no mortgage or children etc) to have a life insurance in place. And I'm struggling to see where it benefited his circumstances. Although I'd like to stress, I'm not arguing that fact, merely trying to find out

Thanks

roonaldo

You're right he didn't need the life insurance. A complaint may well be upheld.

dunstonh

A very simple test for pure life assurance is that if you were to die, would anybody be financially worse off in the event of your death. if yes, then you need life assurance. If not, then you do not.

If the life assurance includes the add on critical illness cover, then it can be justified (as the cost of life assurance and CI is typically just different by pennies or even nothing compared to just CI). If the life assurance includes an investment element and is primarily investment with a nominal amount of life assurance, then that is likely to be fine.

oneconfusedgirl

Thank you so much for taking time to reply! So if I'm understanding correctly;


Generally speaking, if he just had life insurance with no other elements to it (e.g. no critical illness etc), then he has been mis-sold, due to the fact that no one would have been financially worse off in the event of his death (i.e. his debts would not be left to his parents).


But if his life insurance incorporates a critical illness element, or an investment element (which I don't fully understand tbh), then that would be considered as being suitable for him, regardless of living with parents, no dependants etc.


Have I understood you correctly?


If so, I guess the next step is to ascertain whether he had any other elements added to his life insurance, or whether it merely covers him for death? Is there any other 'elements' we should look out for that would likely make it a suitable insurance?

[Deleted User]

oneconfusedgirl wrote: »

if his life insurance incorporates a critical illness element, or an investment element (which I don't fully understand tbh), then that would be considered as being suitable for him, regardless of living with parents, no dependants etc.

Correct.

Critical Illness is claimable by the holder of the policy to assist with costs associated with treatment etc.

If there is an investment element then there would eventually be some kind of dividend, again payable to the holder of the policy-life cover would be secondary.

oneconfusedgirl

Thanks Moneyineptitude! I understand.


I don't think his life insurance does incorporate either of these, but we will have to wait to get the info on it to find out for sure.


At least I understand a little more now


Thanks again for your kind help everyone!!

oneconfusedgirl

Apologies, another question.


If we cannot find his life insurance information, I understand we can do a SAR request for £10, which I believe will get us a full breakdown of his whole account.


But if the insurance is still running, would paying £1 for them to provide a copy of the agreement be enough?

Or would we need more than the agreement to clarify the information discussed in the above posts? In which case, would a SAR request be more appropriate?

[Deleted User]

If you are still paying for the insurance, just complain that he had/has no need for the insurance and see what the bank comes back with. No point spending any money researching this unless it's historical finance which he no longer has.

oneconfusedgirl

That's our plan. But we first need the documents to know what the insurance includes.


If the insurance includes e.g. critical illness, then he'll consider keeping and no complaint necessary. But if it's merely life insurance (covering death), then he will definitely cancel and possibly complain.


But like I said, we can't make that decision without finding out what the insurance covers on the documents. Hence my question about SAR request or alternative information request

[Deleted User]

oneconfusedgirl wrote: »

But like I said, we can't make that decision without finding out what the insurance covers on the documents.

This requires just a simple and free request to the current provider (not seller) of your insurance. No SAR or Agreement is necessary to ascertain what cover a current Insurance policy provides...

oneconfusedgirl

Oh ok fantastic. I just thought businesses sometimes quote the 'administrative' cost to providing copies of lost documents.


But that's great! We shall request the copies to find out what the insurance covers, and go from there!


Thanks again for all the advice