Standard Life - annuity missold to my dad - that didn't ask him any health questions!

anotherdollar

I have just found out my dad was sold a standard annuity from Standard Life. He had Angina at the time of the sale and they did not ask him any health related questions. In my book, they should have sold him an enhanced rate annuity given his Angina. My dad said that at no stage did they ask him any basic health questions and they simply sold him a standard rate annuity. Simple questions would have also ascertained that he was not financially aware either, so he didn't know that having Angina would have increased the rate offered!

Anyway, I have gotten him to send off a letter to complain about the selling process and requesting that they offer him the enhanced annuity rate (back dated)!

I am angry that such a large well respected company didn't even send him a tick list of common medical conditions that would have made him eligible for the enhanced rate. Even asking over the phone "do you have any medical conditions requiring regular medication?". "Have you been hospitalised for any reason?". This would have been a simple "yes or no" answer! If he answered yes, then they should have automatically refused to sell him the standard rate annuity!

Anyway, at the time of sale (2 years ago) he was 67 years old and my mum was 65 years old (my mum is in good health). He chose a level annuity with 100% spouse cover, so the annuity won't be cut if he dies first!

QUESTION) Roughly speaking, how much more should he have been offered given his Angina? I know it would be difficult to say for sure, but a rough % would be appreciated? For example, 20% more roughly?

Many thanks, Richard.

enator

Have you still got the original letter from SL?


I have an annuity quote from SL in front of me & there is a paragraph explaining Enhanced Annuities - it would be difficult to miss it as it's on the same page as the calculations.


So the question is, was the same wording in the letter two years ago?


Also, if there is a spouse's pension & she is in good health it isn't necessarily so that the rates would be better as they would end up paying her for many years instead.

TBagpuss

Have you also checked whether he would have been entitled to an Impaired Life annuity if he was seeking 100% spousal cover?

anotherdollar

I have looked at the paperwork and they shouldn't have sold him the standard rate annuity, since they never asked him if he had any medical conditions!

Saying that it is the buyers job to find out if you should be offered an impaired life rate should be outlawed. It should be their job to find out if their customer for over 40 years earning them a fortune is eligible for the enhanced rate and not the other way round. They have a duty of care in my book!

There are hundred's of pieces of paper sent to him. If they asked him "do you have any medical conditions requiring medication?". They shouldn't have sold the annuity until he answered "yes or no"! Clearly, he would have answered "yes"!


It like saying "you freely purchased a glass of poison and drank it, because we sent a document explaining that you might be eligible for a glass of pure water, but we sold you the poison anyway since you didn't see this or understand this!".

These companies are making a fortune on selling (miss-selling) annuities. A simple calculation shows that if they had a allowed him to put the money under the mattress earning no interest, then there would have been enough money to pay out for over 25 years! Clearly, a zero percent interest rate scenario is not realistic!

Does the new paperwork from the Standard Life say how much the rate would be increased by if you have Angina?

Thanks,

anotherdollar

TBagpuss wrote: »

Have you also checked whether he would have been entitled to an Impaired Life annuity if he was seeking 100% spousal cover?

None of the quotes took into account the impaired life and this includes the quotes for no spouse cover, 50% spouse cover, etc.

dunstonh

In my book, they should have sold him an enhanced rate annuity given his Angina.

Standard Life dont retail enhanced annuities.

My dad said that at no stage did they ask him any basic health questions and they simply sold him a standard rate annuity.

Which is logical given that they dont retail enhanced annuities. However, they did run a pilot which is now in wider use where they had a limited panel of providers and some of those offered enhanced rates. However, it isnt very good (i've seen clients use it to get figures and I have beaten them every time). This results in a sale of a annuity that is not from Standard Life.

So, did your dad buy a Standard Life annuity or did he buy another provider annuity? (it helps us know if he used their in-house limited panel service or not)

These companies are making a fortune on selling (miss-selling) annuities.

They are not mis-sold. Certainly the terms are not great on in-house annuities and some didnt go out of their way to encourage people to use an IFA (which is what he should have done). However, if it was a non-advised service he had from Standard Life then he should not expect advised service standards.

It like saying "you freely purchased a glass of poison and drank it, because we sent a document explaining that you might be eligible for a glass of pure water, but we sold you the poison anyway since you didn't see this or understand this!".

No. its more like saying this is what we offer you. You should seek advice from an IFA who may be able to offer more. However, if you dont then you accept that it may not be as good.

Annie1960

I'm just getting an enhanced annuity at the moment. My AVC is with Scottish Widows.

They did not at any point ask me if I had any health problems of if I had been in hospital.

In their small-print, they had a sentence stating that if you believe you may be eligible for an enhanced annuity, you should call their number and they provide more information. I did this, and got details of another company who sent me a questionnaire.

You need to check the small-print of the illustration SL sent your father to see if this included any information about enhanced annuities.

gadgetmind

trelore wrote: »

we sent a document explaining that you might be eligible for a glass of pure water, but we sold you the poison anyway since you didn't see this or understand this!".

They told him how much their water cost, and informed him he was free to buy a drink elsewhere if he wanted. He bought the water but has now noticed that some other vendors sell beer for the same price. Now he wants beer instead, and insists they should have offered him beer, despite the fact that they don't even sell it.

bmm78

trelore - I can certainly understand your frustration at your father missing out on any enhancement due to his condition.

However, if Standard Life provided your father with a statement explaining the Open Market Option (which appears likely), they were acting within the regulatory framework in place at the time.

There is an obligation on the provider to inform clients of their rights under the Open Market Option. There is no obligation for them to provide an enhanced rate for a particular condition, or indeed to offer enhanced annuities at all. It is down to the client as to whether they exercise the Open Market Option and take advice from an IFA.

If it was arranged on a non-advised basis, I'm afraid there seems little chance of any claim via the Financial Ombudsman service being successful.

bigadaj

This persistence in blind trust of financial institutions still exists despite all the evidence that they will act in their own interests, and not yours a a the client,a s they are a business after all.

Your insurer is no different to your supermarket or car dealer, they sell a product, shop around before you buy and you may well get it cheaper or better value elsewhere.

le_loup

That's why allowing people to blow their pension is a bad move for most people.