Life Insurance through New Homes Ltd, have I got a leg to stand on?

qwertinatom

Hmmmmm I only seem to come on here when I'm stuck.

Bought a house last year, took out the mortgage through the builders Mortgage advisers, New Homes Ltd. During the process they said that there would be a £250 charge unless I took out life insurance out through them.

Price was slightly higher, but not too bad. About £15 a month, so I agreed.

After a little while the price increased due to a couple of reasons (some sort of tax change and due to me having a pre exisitng injury) to £33 a month.

Take into consideration I am 27 (was 26 at the time) in good health and the pre exisitng injury was a dislocated shoulder which is now fixed!

Anyway I went with it under the impression that after a year I could cancel it and take out a new policy, bit of research shows I'll be paying under £10 a month for the same level of cover.

However I rang New Homes today only to be told it is for two years! Which wasn't explained to me at the time.

I'm going to cancel the policy regardless, I wish I had never taken it out in the first place, but do I have a leg to stand on with complaining about this and refusing to pay the £250?

According to the paperwork New Homes get a commission after a year anyway!

Help much appreciated

dunstonh

During the process they said that there would be a £250 charge unless I took out life insurance out through them.

A very common model and one that is allowed as long as there is a financial need for the insurance policy taken out.

After a little while the price increased due to a couple of reasons (some sort of tax change and due to me having a pre exisitng injury) to £33 a month.

The only life assurance affected by tax was pension term assurance and that hasnt been available for many years for new business. A pre-existing condition is almost certainly the reason.

However I rang New Homes today only to be told it is for two years! Which wasn't explained to me at the time.

Their fee agreement will usually cover things like this. Look at that.

'm going to cancel the policy regardless, I wish I had never taken it out in the first place, but do I have a leg to stand on with complaining about this and refusing to pay the £250?

Based solely on what you have said, no you dont. You knew the fee was £250 or the insurance policy. The insurance policy will pay them an amount but only if you hold onto it for the clawback period (which can vary from 2-4 years - i assume this one was 2 years). You chose that method. So, assuming that their documentation is correct, you don't have a leg to stand on.

Giving you the choice of a fee or an insurance policy is the correct way to do it. Had they not given you the fee option, then there is potentially scope there.

You need to be careful as it is quite normal for the agent to use the small claims court and ask for a CCJ against you. If they have the paperwork to support it, then they usually win these. If the paperwork is not present then they would not be expected to win.

According to the paperwork New Homes get a commission after a year anyway!

Not the full amount as there will be a clawback.

Quentin

qwertinatom wrote: »

However I rang New Homes today only to be told it is for two years! Which wasn't explained to me at the time. .....

Tell them this is the first you have heard about being tied for 2 years and ask them to provide a copy of the (signed by you) agreement showing this.

As they apparently didn't get an agreement for 2 years from you, then they can whistle!

qwertinatom

Thank you for the informative replies.

I will request a signed copy of the agreement.

When I said I was going to cancel the policy I didn't mean I wasn't going to pay the £250 if I didn't have too. I was just trying to find out if this was all correct and above board.

Thanks

Tom