Lifesearch - dodgy conduct?

thescouselander

I've recently been trying to arrange for some life cover for me and my wife and I have ended up being contacted by Lifesearch. I allowed them to quote but I'm not sure I should continue to talk to them for a number of reasons.

1) Lifesearch quoted prices from couple of companies but when I asked to see the full policy terms and conditions they were only prepared to give me the key facts documents.

2) One of the key facts documents seemed to indicate the policy was aimed at small employers arranging cover for their employees on a single life basis - not at all our situation.

3) I have recently been told that if I cancel the policy within the first 4 years I'd have to pay them £200!

This all seem very strange to me. I've never taken a life cover policy before but it seems Lifesearch have been withholding information for some reason.

The internet seems to suggest this company is reputable but I'm not so sure after my recent dealings with them. Does anyone know anything about this company and whether their advice is any good?

stephenni1971

thescouselander wrote: »

I've recently been trying to arrange for some life cover for me and my wife and I have ended up being contacted by Lifesearch. I allowed them to quote but I'm not sure I should continue to talk to them for a number of reasons.

1) Lifesearch quoted prices from couple of companies but when I asked to see the full policy terms and conditions they were only prepared to give me the key facts documents.

KFI is all that is required to be provided

2) One of the key facts documents seemed to indicate the policy was aimed at small employers arranging cover for their employees on a single life basis - not at all our situation.

The KFI will include info on all options and variations of the policy - even those you may not be taking. Just like my car manual has information on heated seats and a sunroof but they aren't on the car.

3) I have recently been told that if I cancel the policy within the first 4 years I'd have to pay them £200!

WHen a policy is sold a commission is paid which should you cancel within an inital period can be clawed back by the insurer. They have chosen to have this clause in their contract to cover them for this. Nothing wrong with that.

This all seem very strange to me. I've never taken a life cover policy before but it seems Lifesearch have been withholding information for some reason.

The internet seems to suggest this company is reputable but I'm not so sure after my recent dealings with them. Does anyone know anything about this company and whether their advice is any good?

Answers above...

kingstreet

2. Unless they've sent a Relevant Life KFD out by mistake?

thescouselander

Thanks but I'm not sure I get your point about the KFI information - what do you mean it is all that's required?

From my own point of view if I'm going to sign a contract I usually read the small print first. The key facts document is not a contractual document and they do not always fully reflect full terms and conditions. So the bottom line is I require sight of the terms and conditions before I sign up and I think it reasonable that they should provide me with them.

Murphy2011

They can get you a copy of the general Terms and Conditions if you wish but you won't get your own copy of the contract or policy until you have been medically underwritten by the provider they are suggesting; it may be that there will be exclusions or loadings that are applied.

The KFI essentially lays out the basics of the contract; what it does, what the provider responsibilities are and what yours are as the policy

thescouselander

Murphy2011 wrote: »

They can get you a copy of the general Terms and Conditions if you wish but you won't get your own copy of the contract or policy until you have been medically underwritten by the provider they are suggesting; it may be that there will be exclusions or loadings that are applied.

The KFI essentially lays out the basics of the contract; what it does, what the provider responsibilities are and what yours are as the policy

But if I take the company up on their offer I am then bound (as I understand it) by this £200 fee if I pull out. I've never heard of a contract where you only see the terms after signing up.

Add to that Lifesearch have not provided me with a written copy of their terms so I've no idea what they want me to sign up for.

I think I'll email them to let them know I'm not interested.

ACG

Life insurance is pretty simple:
Tell the truth on the application,
It gets underwritten,
They issue terms.

The company (life search) can put the start date as to be arranged.

So it can all be underwritten, you then get the terms. Assuming you are happy the policy starts and if you cancel you are bound by the £200 fee. If you are not happy then the policy does not start and so does not need to be cancelled.

Who is the insurer? Put *insurer name* life insurance policy conditions - that should find you the full policy conditions.

thescouselander

ACG wrote: »

Life insurance is pretty simple:
Tell the truth on the application,
It gets underwritten,
They issue terms.

The company (life search) can put the start date as to be arranged.

So it can all be underwritten, you then get the terms. Assuming you are happy the policy starts and if you cancel you are bound by the £200 fee. If you are not happy then the policy does not start and so does not need to be cancelled.

Who is the insurer? Put *insurer name* life insurance policy conditions - that should find you the full policy conditions.

That might be how it works but I have not seen confirmation of when the risk of a £200 charge kicks in because Lifesearch haven't provided me with their terms - I'd like these in writing.

In any case whether or not we stay covered for the minimum term is their risk and why should we underwrite it? I certainly wouldn't pay £200 for the limited advice I have received and their arrangements regarding commision payments are not my concern. We don't benefit from the commission either so the risk/reward balance seem quite inequitable.

I think if all the mis-selling scandals of late have shown us anything it's that you need to deal with financial services companies very carefully which means understanding everything up front.

Murphy2011

The only reason that Lifesearch would get a clawback of their commission is if you choose to cancel the policy within the 4year clawback period, if you die and a claim is made then the commission wouldn't be reclaimed by the provider. Therefore you are essentially their risk as their income depends on your continuance of the policy.

The question of how much would you pay for advice is a good one, a solicitor may well charge £100 per hour or more as might an accountant but in terms of offering you advice that could save your family from financial ruin most people don't seem happy to pay for good financial planning.

People taking out policies do benefit from the commission arrangements as if they did not exist how would companies get remunerated for the advice they give and what incentive would they have to guide clients through what can be a minefield? In the investments world now commission is no longer used as a method of reimbursement having been replaced by fees and people with small investment sums can end up being priced out of the advice process completely.

A good financial adviser is worth their weight in gold, they can help you look after your loved ones, ensure that you are financially secure come what may and that the right amount if money gets to the right people in the most tax efficient manner possible but unfortunately as with any industry there will always be those that don't live up to the same high ideals.

Your choice is yo do it yourself online, go through a firm like Lifesearch or perhaps get a referral from a friend or family member to a reputable IFA, you always have options

thescouselander

Its not that I'm not willing to pay for good advice but this company approached my completely without my asking. I don't mind that they get commission from helping me and I have every intention of keeping my cover.

My issue is that many other products are sold in similar ways and I've never been held to this sort of condition previously. They are making money on an opportunistic basis from me and without the threat of clawing back their commission if something goes wrong the arrangement seems a fair deal. I am not however, in the business of underwriting the risk in business models of companies that approach me on an unsolicited basis.

kingstreet

Ask Lifesearch for an Initial Disclosure Document.

This sets out how the are remunerated and will explain the fee in lieu of clawback situation.

Next, you should receive a quotation for the product you have been recommended together with a key facts "wraparound" which sets out the key contract terms.

Insurers will also have a copy of the policy available and I don't really know why Lifesearch won't provide it. It's usually a pdf and cane be emailed to you in about five minutes.

Such firms are based on quick-turnover low-overhead business and thy may feel additional information requirements reduce their profitability. A full-service advisory firm would be more than happy to provide whatever help and information you require but the bulk of the commission won't be rebated to you in lower premiums.