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Insurance Policy Deposited as security
pennyblack78
Posts: 1 Newbie
Some years ago borrowed money from bank to purchase printing machinery. Bank asked me to take out a policy to cover loan, I made my life policy over to bank as security for approximately three years. Am I in with a chance to make a claim?
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Comments
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Anything you put up as security for that loan is not refundable. Why would it be? Obviously the Bank did nothing wrong in granting you the loan only on the proviso that you had enough security (insurance) to cover it in the event of your death..pennyblack78 wrote: »Some years ago borrowed money from bank to purchase printing machinery. Bank asked me to take out a policy to cover loan, I made my life policy over to bank as security for approximately three years. Am I in with a chance to make a claim?0 -
Bank asked me to take out a policy to cover loan, I made my life policy over to bank as security for approximately three years. Am I in with a chance to make a claim?
Unless you are dead, you cannot claim on the insurance. However, if you mean can you complain then what would you complain about. Just because you didnt die, does not make it mis-sold. That is something to be pleased about. I hope my policies are never claimed on whether its life assurance, car insurance or household.Obviously you didn't have a good enough credit score for the loan and the Bank did nothing wrong in granting you the loan only on the proviso that you had enough security to cover it.
It wouldnt have been down to credit score. Commercial lending frequently requires the key person to be insured as a form of security on the debt should that key person die. If the key person was to die, then the business could fail (or in case of one man bands or very small companies it would likely shut) and assets would have to be sold to repay the debt and second hand machinery doesnt retain much value. So, the lender covers itself with the life policy as security.
This is allowed and quite normal in the commercial world. Nothing wrong with it at all.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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