Life and Crtical Illness Insurance

kapitalrob

When we took out our existing mortgage 14 years ago i had to take out a joint life and critical illness insurance policy to cover both myself and my wife.This was to cover our monthly mortgage payments if one of us died or contracted a serious illness. If we did not do this then i could not have the mortgage. I did not want to take out this policy as i had never taken one out on previous mortgages and felt that it should be optional rather than compulsory. Could this be grounds to make a claim for mis sold payment protection insurance. Does any body have knowiedge or experience of this.

HappyHarry

I did not want to take out this policy as i had never taken one out on previous mortgages and felt that it should be optional rather than compulsory.

It may be that the broker you used waived the mortgage fee for you if you took out life / critical illness cover. In which case, you have saved yourselves some money. It may be that the mortgage company insisted on life cover as a condition of the mortgage.

Both of these scenarios were common in the past, and there is nothing wrong with that.

There is nothing wrong with the insurances you have, and with a mortgage and family, they would usually be recommended. Often, Income Protection is recommended instead of Critical Illness cover, but is generally more expensive.

Could this be grounds to make a claim for mis sold payment protection insurance.

No. It is not payment protection insurance.

With a family dependant on your income to keep your property, there is a clear need for the insurance you have. Nothing you have said shows any reason why a miss sale may have taken place. Unless, of course, you are able to demonstrate that you are immortal.

dunstonh

When we took out our existing mortgage 14 years ago i had to take out a joint life and critical illness insurance policy to cover both myself and my wife.

Most lenders had stopped requiring life assurance at that time. Some still needed it but most not.

However, if you used a mortgage broker and their deal was that you needed to buy insurance from them then that is allowed and is a very common model (still is today).

Plus, its totally common sense to have it with a mortgage which is why most people do it.

Could this be grounds to make a claim for mis sold payment protection insurance.

Its not payment protection insurance. Plus, if it was required then it was required. That is not a mis-sale unless the product sold was unsuitable.

Nasqueron

If one of you died or was severely ill to the extent you couldn't work for a long period, or for the rest of your life, how would you keep up the mortgage payments to stop you losing your home?

As above, if it was a condition of the mortgage or no lending then it was not miss-sold. If it was a requirement to buy to get free advice from a broker then it was not miss-sold (as you could have paid the fee instead).

If you can prove you have a job for life, are immortal and can never get ill then you might have a case

magpiecottage

kapitalrob wrote: »

Could this be grounds to make a claim for mis sold payment protection insurance.

Given that what you bought is not payment protection insurance, it can no more be missold payment protection insurance than a missold Mars bar.

What you had did not cover mortgage repayments, it would have paid your mortgage off in one lump sum if you had made a valid claim on the policy.

Furthermore, in 2001, general insurance was not regulated - so FOS will not have jurisdiction over an independent broker.

If it was sold by a lender you would need to prove that the cover was not necessary, that you were told it was AND that you would not have taken it. On this last point, FOS would consider whether it was reasonable for you to have it at the time. Nasqueron has state the issues they would look at in this regard.

kapitalrob

The independent broker that we used never explained that by taking out this policy this was in lieu of a fee being charged.

I do realise that non of us are immortal but my main point was that we should of been free to choose whether or not we took out this cover without being held to ransom over the mortgage offer.

Thank you all for your comments and for taking the time to respond.

Nasqueron

kapitalrob wrote: »

The independent broker that we used never explained that by taking out this policy this was in lieu of a fee being charged.

I do realise that non of us are immortal but my main point was that we should of been free to choose whether or not we took out this cover without being held to ransom over the mortgage offer.

Thank you all for your comments and for taking the time to respond.

If you didn't get charged a fee, to be blunt, how do you think he would pay his bills? It'll be in the documentation anyway

[Deleted User]

kapitalrob wrote: »

my main point was that we should of been free to choose whether or not we took out this cover without being held to ransom over the mortgage offer.

Regardless, your "complaint" will not result in a refund unless you can show some actual mis-selling took place..