Mis-selling of various Insurance's when taking out our first mortgage

[Deleted User]

roonaldo wrote: »

It's also a bit odd that you say this was an advised sale and the adviser checked your demands and needs. You said you told him what cover you had, but he advised you to take it anyway and you agreed anyway? It a bit odd that.

Clearly, the advisor saw that the existing insurance was inadequate and so advised additional cover. The OP had discretionary employment cover which only paid out for death in service and, even then, not a substantial enough amount.
As you point out, the OP initially agreed to this cover, it was therefore not mis-sold.

magpiecottage

Shelley1969 wrote: »

We had cover for sickness and redudancy with our employers.

I have seen this claim many times in respect of redundancy. However, it has never turned out to be a contractual commitment which an employee can be certain of but, at best, a statement of intent. In the event that the employer goes bust it will definitely not pay out.

As has been noted elsewhere, the MPPI would normally have paid out in addition to sick pay so it seems odd that you did not claim when you fell ill.

we both had Life Insurance with our employers, which the Financial Consultant was aware of.

The financial consultant was probably also aware that it was payable entirely at the discretion of the pension scheme trustees, that the employer could discontinue it at any time and if you left your job for any reason (including redundancy) it would discontinue. Furthermore, if your health were to fail in the meantime you might not be able to get cover later.

By contrast, once in force, your own policy would continue for the set term - provided you continued to pay the premiums.

Shelley1969

dunstonh wrote: »

irrelevant. MPPI pays out in addition and has no overlap with the rest. The FOS has been turning down complaints with 6 months full pay, 6 months half pay with MPPI.


Also, irrelevant. It is a discretionary payment that can be removed. It may also be paid to the wrong person. e.g. for unmarried couples without children it could be paid to the parent and not the cohabiting partner. it is normal for death in service to be disregarded for mortgages. It would be included in the personal provision shortfall analysis but seeing as DIS is typically only 2 to 4 times salary, it is not enough to make up the required financial need.


Lets put aside your timebar for the moment....

Death in service with employer would not be enough. You were in a relationship (married/unmarried we dont know) and had two children. So, your life cover need would be about 10-15x your income plus debts. Your employer death in service would be around 2-4 times. So, you would be a long way short of your need.

MPPI pays out in addition to employer benefits. It is not restricted like some PPI. Redundancy above statutory is only paid if the company can afford it. So, it is not guaranteed.

Most MPPI complaints fail because mortgages are serious long term debts with lifestyle changing consequences if it goes unpaid. Most loan and credit card PPI complaints would succeed on your reason as they are short term debts with no lifestyle changing consequences if they go unpaid.

Your life assurance complaint has no legs whatsoever as you are seriously underestimating your financial need.

Thanks for the information

Shelley1969

roonaldo wrote: »

Was your death in service benefit from your employer enough to pay off the mortgage? If not then its irrelevant.

For me it would have been £18,531 x 4 = £74,124K (shortfall £1,876), as our mortgage at the time was £76K. My partners income was £20,500 x 4 = £82,000. This was listed in the Compliance Register Summary

I wouldn't get too hung on having employer benefits, if your employer went bust you would get none of this from them and this is what insurance is for!

Mortgage PPI is good. It also pays out on top of sick pay too.

I have spoken to Nationwide regarding my illness in 2003 which I received full pay from my employer for the 9 months I was off sick, Nationwide suggested claiming for a back payment, which I'm in the process of doing, although Nationwide incorrectly informed the insurance company that I wasn't covered on the policy!!!

It's also a bit odd that you say this was an advised sale and the adviser checked your demands and needs. You said you told him what cover you had, but he advised you to take it anyway and you agreed anyway? It a bit odd that.

The consultant completed a Compliance Register Summary, which stated as with repayment Mortgages, it is advisable to take our life cover to protect this type of Mortgage.

dunstonh

For me it would have been £18,531 x 4 = £74,124K (shortfall £1,876), as our mortgage at the time was £76K. My partners income was £20,500 x 4 = £82,000. This was listed in the Compliance Register Summary

So, in really really rough terms, as you had a family, you would need at least 10x each of your income plus debts. If the income was £18,531 that would be £185,310 for family protection plus a further amount of £76,000 for the mortgage. A total of £261,310. Your employer provided £74,124 leaving you nearly £200k short. (replicate that for your partner using his income).

So, expectation in the case for a recommendation would be for a decreasing term assurance for the mortgage and a level term assurance for the family protection (possibly two or even three level term assurances but more likely a single joint level term assurance).

I have spoken to Nationwide regarding my illness in 2003 which I received full pay from my employer for the 9 months I was off sick, Nationwide suggested claiming for a back payment, which I'm in the process of doing, although Nationwide incorrectly informed the insurance company that I wasn't covered on the policy!!!

That is good news.

The consultant completed a Compliance Register Summary, which stated as with repayment Mortgages, it is advisable to take our life cover to protect this type of Mortgage.

It is. Which is why the vast majority of people take out life assurance with their mortgage. You are very much swimming against the tide on this one and its difficult to see any wrongdoing here based on what you have said.

Shelley1969

dunstonh wrote: »

So, in really really rough terms, as you had a family, you would need at least 10x each of your income plus debts. If the income was £18,531 that would be £185,310 for family protection plus a further amount of £76,000 for the mortgage. A total of £261,310. Your employer provided £74,124 leaving you nearly £200k short. (replicate that for your partner using his income).

So, expectation in the case for a recommendation would be for a decreasing term assurance for the mortgage and a level term assurance for the family protection (possibly two or even three level term assurances but more likely a single joint level term assurance).



That is good news.



It is. Which is why the vast majority of people take out life assurance with their mortgage. You are very much swimming against the tide on this one and its difficult to see any wrongdoing here based on what you have said.

Thanks again for all your information and advise.

27col

There seem to be a large number of well informed posters on this thread. thanks to you all.