Life insurance commission clawback

tomhills84

Hi, looking for some advice on a life insurance policy my partner has recently cancelled and a subsequent demand we have received for a clawback of commission.

In December 2012 we bought our first house after finding out my partner was pregnant, this was during a time when I was undergoing surgery for cancer and decided to take the "hassle" out of mortgage and insurance shopping to go to a financial planner.

The chap sorted out our mortgage and a decreasing term policy for my partner (funnily enough no insurance companies wanted to touch me!). Recently a work colleague mentioned to me that he had recently cancelled a similar policy and took out a level term insurance policy for over half the cost so I thought I would review what we were paying out and how much we could save as financially we struggle on a monthly basis. Sure enough I found a new policy for half the price and decided to accept and cancel the decreasing term policy.

In July I received a letter from the financial adviser asking me what the issue is with my insurance and if they could help by reviewing our products. This letter was ignored and the policy lapsed.

Today we have received a letter demanding £310.97 for commission clawback stating that this particular term was covered in the terms of business and this reads:

"For arranging this policy ******* will receive commission as detailed in your personal illustration. If you subsequently cease to pay the premiums on the policy within the initial period, which in this case is 48 months, we will be obliged to refund commission that has been paid to us. In this case we reserve the right to charge you a fee in accordance with our Terms of Business Letter."

My question ultimately is how enforceable is this notice? It was never expressly drawn to our attention (that we can recall however we were a bit preoccupied) and if the product wasn't as expensive as it was for what I consider an inferior product to what we now have we would not have needed to cancel it. It wipes out any saving we have made on the new policy for almost two years and we were looking at trimming our expenses not looking to find a new cost as a lump sum that we don't have!

Sorry for the long windedness of the post but any help much appreciated.

Tom

Quentin

You will have either signed your acceptance of these terms or didn't do so.


If you did, then the terms are binding and you can expect to be pursued for the money you owe.


If you didn't then you can tell him to push off!

dunstonh

My question ultimately is how enforceable is this notice?

Very. I know an adviser that has taken several people to court and won each time.

and if the product wasn't as expensive as it was for what I consider an inferior product to what we now have we would not have needed to cancel it.

An advice product is always going to be more expensive than non-advice as the cost of advice is factored into the premiums. Although its also possible that your product you have now is inferior as the differences are not normally as much as half. A drop off that much is possible if the broker was not independent but if they were, then it suggests the quality of the product has been reduced (options left out maybe or a budget version instead of comprehensive).

tomhills84

Hi there,

Thanks for your replies, sadly think I'm just going to have to suck it up More overtime needed!

Tom