Was I mis-sold Life/CI and Income protection?

Squirrelbean

Hi there

Probably like most people, I get really fed up of PPI adverts and calls and I was pretty sure they didn't apply to me... until I had a think about when I took out my mortgage 10 years ago when recently going through to prune some outgoings.

I went through a broker for my mortgage, and thinking back as hard as I can, I am pretty sure I was told I had to take out life/ci cover and employment insurance. In fact the Legal & General Life/ci policy I took out, I do remember switching to someone else early on in my mortgage and being called by L&G as I was apparently tied in with them for a number of years (5 rings a bell). As I had breached my terms by leaving them I either had to go back or pay the brokers fees of £500.

The income protection (through Trent Services) I did actually have to utilise last year after being made redundant, and I think it is a good idea to have it anyway, but I still think I was told I had to take it regardless.

Both cases it was my broker rather that the companies who advised me to take these policies out. I have no proof of being told 'take them out or else no mortgage', so I'm not really sure if I have a case?

I am still with the same policies 10 years down the line which I know is worth a slap on the hand as is, but I would love to hear some feedback from anyone in a similar situation regards PPI - even if it's to tell me I'm wishful thinking!


thanks

magpiecottage

As far as the life and critical illness cover is concerned, it was, and remains legitimate to pay a fee or allow the broker to take commission (nowadays for investments or pensions only a fee is allowed but you can still pay for pure insurance advice by commision).

So if you then did not keep the policy running long enough and the insurance company took some of the commission back you could have to repay it - provided it was made clear up front that this was possible.

In theory you could complain about it if L&G was responsible for the sale.

With regard to the PPI - advising you to take the policy out is not the same as saying you had to have it and it seems to have been broadly suitable as you were able to claim on it when you needed to.

The only area where you might have a valid complaint seems to be if a single premium was charged and added to the loan so that you paid extra interes.

dunstonh

I went through a broker for my mortgage, and thinking back as hard as I can, I am pretty sure I was told I had to take out life/ci cover and employment insurance.

Quite possibly you were told that. Many mortgage brokers have the business model of providing "free" mortgage advice but require you to buy the insurances via them. That model is allowed providing the insurance is suitable.

In fact the Legal & General Life/ci policy I took out, I do remember switching to someone else early on in my mortgage and being called by L&G as I was apparently tied in with them for a number of years (5 rings a bell). As I had breached my terms by leaving them I either had to go back or pay the brokers fees of £500.

That fits in with the option to either buy an insurance policy and the commission pays the adviser or you pay a fee instead. Commission on life assurance has a typical 48 month clawback period.

Both cases it was my broker rather that the companies who advised me to take these policies out. I have no proof of being told 'take them out or else no mortgage', so I'm not really sure if I have a case?

Doesnt seem to be any wrongdoing here based on what you have said so far.

Squirrelbean

Thanks both for your comments, that really clears things up for me. I thought it might be a shot in the dark but glad I asked anyway!