L&G / Northern Rock redundancy cover

Maccaa007

Good afternoon,

New poster here but MSA fan for many years.

When I purchased my first house back in December 1996 I was sold redundancy cover on my mortgage with the inference of a greater chance of acceptance if I were to take out this cover. Though have no paperwork for the mortgage This cover, I believe, was then transferred to L&G i.e. the payments were made to L&G but still had a northern rock account number. It felt expensive but never the less paid.

I continued paying until 2008. When i visited a tax specialist he queried the payment as we already had seperate critical illness insurance to cover the mortgage, and there fore the only advantage to the policy was the redundancy aspect and the premium I was paying was very high. I cancelled the direct debit but its always weighed on my mind if i had wasted money.

I have checked L&G's current offerings and they advise that they will cover a maximum of 65% of your gross monthly salary. The amount I was covering back in 2002 was 116% of my gross !! goodness knows what it was in 1996. do I have any grounds to approach L&G or Northern Rock some form of refund, I can only assume they wouldn't have paid out to that level if I had made a claim?

Thank you and sorry for such a long winded post

Maccaa

dunstonh

I was sold redundancy cover on my mortgage with the inference of a greater chance of acceptance if I were to take out this cover.

What evidence exists to support that allegation from almost 20 years ago?

When i visited a tax specialist he queried the payment as we already had seperate critical illness insurance to cover the mortgage, and there fore the only advantage to the policy was the redundancy aspect and the premium I was paying was very high.

Critical illness cover does not overlap with MPPI in any area. Indeed, best advice is typically to have both.

I cancelled the direct debit but its always weighed on my mind if i had wasted money.

That is the thing with insurance. If you never claim, you wonder if its a waste. If you do claim, it turns out to be valuable.

I have checked L&G's current offerings and they advise that they will cover a maximum of 65% of your gross monthly salary. The amount I was covering back in 2002 was 116% of my gross !!

The rules changed over the years on how much you could cover. Plus, I suspect you are comparing a PHI policy to a PPI policy which is not like for like.

However, if you have no paperwork for the mortgage cover, how do you know it was covering 116% of your gross salary? MPPI typically covers your mortgage premiums plus 25% up to around £2000pm.

do I have any grounds to approach L&G or Northern Rock some form of refund

You havent given any reason in your post as to a valid basis. Do you want to clarify on why you would ask them for a refund? At the moment, it appears to be a mixing up of products, some inaccurate advice from a tax adviser (who is not authorised to give the advice given) and a bunch of assumptions which may or may not be accurate.

Maccaa007

dunssonh

Thank you for your reply, reality checks are good for bringing things in to focus, it is appreciated
“
I was sold redundancy cover on my mortgage with the inference of a greater chance of acceptance if I were to take out this cover.
”What evidence exists to support that allegation from almost 20 years ago?

Of course none that would stand up in court but just a small detail

“
When i visited a tax specialist he queried the payment as we already had seperate critical illness insurance to cover the mortgage, and there fore the only advantage to the policy was the redundancy aspect and the premium I was paying was very high.
”Critical illness cover does not overlap with MPPI in any area. Indeed, best advice is typically to have both.

Ok
“
I cancelled the direct debit but its always weighed on my mind if i had wasted money.
”That is the thing with insurance. If you never claim, you wonder if its a waste. If you do claim, it turns out to be valuable.

Agreed

“
I have checked L&G's current offerings and they advise that they will cover a maximum of 65% of your gross monthly salary. The amount I was covering back in 2002 was 116% of my gross !!
”The rules changed over the years on how much you could cover. Plus, I suspect you are comparing a PHI policy to a PPI policy which is not like for like.

However, if you have no paperwork for the mortgage cover, how do you know it was covering 116% of your gross salary? MPPI typically covers your mortgage premiums plus 25% up to around £2000pm.
This was only based on crude calculations available on their website i.e. £4.71 per £100 covered and I was paying £140.00 a month
“
do I have any grounds to approach L&G or Northern Rock some form of refund
”You havent given any reason in your post as to a valid basis. Do you want to clarify on why you would ask them for a refund? At the moment, it appears to be a mixing up of products, some inaccurate advice from a tax adviser (who is not authorised to give the advice given) and a bunch of assumptions which may or may not be accurate.

All true and as mentioned i appreciate the advice I was really just checking if It was worth obtaining policy docs to see if I'd been paying for a level of cover that I would never have been paid if I'd claimed

dunstonh

This was only based on crude calculations available on their website i.e. £4.71 per £100 covered and I was paying £140.00 a month

Are you sure it was MPPI? (or ASU as it was back then) Back in the mid 90s, it was around £6.50 per £100. However, maybe the L&G product was multi-segment and covered other things as well.

I have never seen an MPPI with a premium that high before. I have seen PHI at that level.

It may well be worth asking for a summary of the cover the policy provided. As that will answer many questions (and may lead to other questions)

magpiecottage

dunstonh wrote: »

It may well be worth asking for a summary of the cover the policy provided. As that will answer many questions (and may lead to other questions)

Like why was a tax adviser giving insurance advice?