Life Insurance-Living with Parents, No Children

dunstonh

eastender1234 wrote: »

Sorry, I didn't say the loan was 15 years, or if I did I didn't mean to. The life insurance term was 15 years (2004-2019). Is that where the confusion has come from maybe? My apologies

Makes more sense now. When life assurance is taken out to cover a loan, you expect the term and amount to match the loan.

This is increasingly looking like a mis-sale. Single, no dependants, short term loan. No reason for it.

I suspect the reason it doesnt match is minimum premium. An adviser can increase the sum assured to reflect minimum premium and document it accordingly. Normally that would not be a mis-sale as its acceptable and unavoidable. However, as there appears to be no need for the policy in the first place, that point shouldnt matter.

eastender1234

Apologies, I was not making myself clear.

I assume the earlier discussion still applies though; they weren't regulated and so can't have missold, so have no obligation to refund the premiums paid and so the outcome of a claim would be uncertain?

If we do make a complaint (which is looking increasingly likely), I assume he simply states that he feels he was missold for the four main reasons; single, no dependents, short term loan and no other reason for the loan? In addition to stating what he would like to happen; i.e. cancel the policy and refund amounts paid since 2004 (even if that is taking a shot in the dark)?

magpiecottage

eastender1234 wrote: »

Does that mean they could have made a claim against his parents for the loan, and therefore his parents would have in fact been financially worse off i the event of his death?

No

Unless the parents acted as guarantors, the bank could not claim against them.

On death, any assets available would normally be used to meet funeral costs etc.

After that, they would be used to pay any creditors. That would include anybody he owed money to - including the bank.

Once that had been addressed anything left would be distrubuted according to the will or law of intestacy.

If there was not enough to pay all creditors, the executors would not be liable unless what assets there were had been incorrectly distributed.

There is a small risk that the family could have to pay funeral costs if there was insufficient in the estate to do so but, as I say, the bank would get nothing until after the funeral costs had been paid.

So it sounds like a missale to me and I would suggest a complaint is made. No particular words are needed but I suggest it is done by e-mail and a copy is kept in case it needs to go to FOS.

eastender1234

That's very helpful again, thank you!

I think we will indeed go ahead and make a complaint and I shall indeed do this by email or letter so there is a record.

Thanks once again to both of you for all your kind help!

dunstonh

Do it by letter. Emails are not great with banks or providers.

eastender1234

I have drafted this letter to send tomorrow:

I am writing to you to complain about the sale of a current financial product I have with you, namely a Level Term Life Insurance Policy (policy number detailed above).

As you will be aware, I was sold this product in July 2004, alongside a personal short-term loan and PPI. It has now been brought to my attention that this may well have been mis-sold to me as it was inappropriate for me in my circumstances.

At the time of being sold this product, I was single, living with parents and without any dependents, had only a short term loan and no other relevant reason which made this product appropriate for me. No individuals would have been financially disadvantaged in the event of my death.

These points are still applicable today and so the product has been, and remains to be, unsuitable and inappropriate for my circumstances.

I would therefore like to cancel my life insurance policy with immediate effect and would like to request that I be refunded for the premiums paid on this policy, as a result of it being inappropriately sold with no regards to the relevancy to my circumstances.

I look forward to hearing from you

Hopefully I am getting across what I have discussed with you both. Although if anyone has any criticisms, please do let me know.

I guess I will post tomorrow and see what comes of it

dunstonh

That is fine. you dont actually need as many words as that. maybe bullet point the faults. However, it says what it needs to.

eastender1234

Was just about to get the correct address to send my complain to, but I'm unsure whether I should be sending my complaint to Scottish Widow or Lloyds complaints dept?

It's a Scottish Widow Life Insurance Policy, but was sold to me in branch at Lloyds?!?!

Bearing in mind my complaint is about the policy being mis-sold (of which Lloyds sold it to me) but also that it's still inappropriate so wanting to cancel (presumably a Scottish Widow request).

magpiecottage

eastender1234 wrote: »

Was just about to get the correct address to send my complain to, but I'm unsure whether I should be sending my complaint to Scottish Widow or Lloyds complaints dept?

It's a Scottish Widow Life Insurance Policy, but was sold to me in branch at Lloyds?!?!

Bearing in mind my complaint is about the policy being mis-sold (of which Lloyds sold it to me) but also that it's still inappropriate so wanting to cancel (presumably a Scottish Widow request).

I am going to disagree with dunstonh.

The Financial Services Register says you can e-mail it to [EMAIL="phil.cliff@lloydsbanking.com"]phil.cliff@lloydsbanking.com[/EMAIL]

Lloyds owns Scottish Widows.

eastender1234

Ok so I sent the letter I discussed above and have received a reply. This is a bit of what they have said:

"Your LTA was taken out on a 'direct offer basis'. This means that you didn't seek or receive advice from one of our financial advisers when you chose to start your LTA policy.

Scottish Widows Direct Sales sold you an LTA policy to ensure in the event of a claim the policy would pay out a lump sum of £50,000. It was your decision to proceed with the policy and you decided on the cover you needed.

In addition, the illustration you received headed ' Level Term Assurance Plan' confirmed under the applicants signature that 'I have not received any guidance on whether this is right for me taking account of my own individual circumstances'.

When your LTA policy started Scottish Widows sent you a policy schedule and policy provisions. The policy schedule shows the sum assured, premium, the start date and the expiry date of your policy. The policy provisions explain the full details and characteristics of the LTA policy, including when the policy pays out.

I have made my decision on the balance of the information available to me. The evidence suggests that you were under no obligation to start your LTA policy and that you neither sought or received advice to do so".

It obviously then goes on to say about whether I wish to cancel the policy, and that I have the right to refer to the FOS within 6 months.

I guess the part that I'm surprised about it that they can sell a product that they know is completely useless to you. I understand they are saying he didn't ask for advice, (which he can't recall if is true or not but doesn't make total sense to him), but he was a customer to Lloyds banking so they knew everything there was to know about him and they couldn't simply inform him that it's unusual for a young person, living at home with no dependents and nothing but a short term loan, to take out such cover!?! Very disappointing anI think he's now considering leaving them (he still banks with them today!).

So based on the information above, I guess without being able to remember anything to oppose their argument, there is not really any point taking it to the FOS is there?

Slightly surprised by the response and the defiant part of me wants to take it further, but is there any point after what they have said?

Any advice would be greatly appreciated