Income Protection Plan cover - mis-sold?

pdarrell

I've been reviewing policies.
I have been paying monthly to an insurance company for an income protection plan since 2001. Looking now at the small print of the policy, there are so many physical ailments and conditions that I would have had to have suffered before the policy would have paid out, it really looks like I have been paying for a policy that would have had absolutely minimal likelihood of paying to me any regular monthly disability payments in lieu of a salary from employment.
A financial adviser sold me the policy when I moved jobs.

Is this something for which I would be able to make a mis-selling claim?

dunstonh

Is this something for which I would be able to make a mis-selling claim?

income protection is considered one of the most important insurances to have. Almost certainly you had a financial need for it as no employer pays sick pay forever. So, generically, you are unlikely to succeed on a complaint about it being unsuitable.

If the adviser was a tied agent of an insurer, then they can only sell what they offer. if that product is basic then so be it. That is the risk of dealing with a tied agent. However, if the adviser was an IFA then they have access to budget and comprehensive plans from the market place and should recommend what is best based on your needs and budget.

So, was it put in place by an IFA or tied agent?
how long does your employer pay if off sick?

magpiecottage

If the adviser was independent then a 2001 sale would not fall under FOS jurisdiction.

I think you may be misunderstanding the policy. It would be unusual for you to have to suffer multiple ailments for an income protection policy although there are some which have an option to pay an income if you have no income to replace. These are usually for stay at home mums etc.

pdarrell

Looking at the papers, I was sold the policy by someone (with letters "MLIA (dip) FLIA" after their name) working for Inter-Alliance PLC which was an IFA regulated by the PIA.
The benefits were deferred for 52 weeks, limited to 50% of pre-disability income.
During a longterm disability, the employer would have paid full pay for 6 months then half pay for the next 6 months.

Benefits under the policy would only have been payable if I could not manage, without assistance, 3 of the following "activities of daily living":
1. dressing / undressing ; 2. washing / bathing ; 3. eating (feeding oneself prepared food); 4. preparing food (a basic meal) ; 5. climbing 12 stairs ; 6. shopping (getting to/from shops and carrying a small shopping bag).
Likewise for "activities of daily working":
1. walking 200 metres ; 2. climbing 12 stairs ; 3. bending to pick up an item or to get in/out of a car ; 4. communicating by phone ; 5. eyesight, being certified as blind or partially sighted ; 6. dexterity, unable to use hands and fingers to write legibly ; 7. healthcare, the ability to arrange to see a doctor and take prescribed medication ; 8. financial independence, unable to understand money and financial transactions.

Do you still consider no claim would succeed?

dunstonh

Do you still consider no claim would succeed?

Its not PPI and nothing suggests any mis-sale. You clearly had a financial need for the policy and the deferment ties in exactly with your employer benefits. So, it was set up correctly.

Nothing there indicates any wrongdoing. Indeed, just the opposite. However, you would expect that. Just 0.5% of complaints at the FOS are about IFAs. Most of them end up being rejected. The FOS commended IFAs just over a year ago for the way they could show they knew their clients.

pdarrell

Many thanks

magpiecottage

pdarrell wrote: »

IFA regulated by the PIA.

That tells us FOS has no jurisdiction because Income Protection was never regulated by the PIA and it is not something an IFA would be likely to volunteer to allow it to rule on.