Does life insurance come under ppi?

Chinagirl_2

I wrote to my bank as I believe the life insurance policy I was sold to cover a business loan was miss-sold. I was told I had to take out their insurance policy against the loan and could never change as they would just add the insurance payments to my loan if I stopped paying. When I wrote to the bank it was actually legal and general who got back to me as that is who the insurance was with. They have stated this does not come under ppi and I am not necessarily owed anything back as I had to have insurance. My argument was that 1. The bank made me take out this particular insurance, they made it clear I couldn't use any other insurance. 2. when I wanted to change they said no or they would add the money to my loan. 3. It turned out this insurance was not specifically for a business account but could be given to a family member on death and so would not pay off the loan which is not what I thought I was buying. Do I have a case or are they right and this insurance does not come under ppi or miss-selling?

magpiecottage

The bank is entitled to stipulate the terms on which it will offer a loan.

You can complain but unless your business has less than 10 employees (including you if it is a Limited Company) and both turnover and assets of less than the sterling equivalent of

magpiecottage

A lender can require insurance as a condition of its loan as an exercise of legitimate commercial judgement.

If you are unhappy you can compain but bear in mind that not all businesses are under the jurisdiction of the Financial Ombudsman Service.

dunstonh

I wrote to my bank as I believe the life insurance policy I was sold to cover a business loan was miss-sold.

You have given no reason for complaint in your post.

I was told I had to take out their insurance policy against the loan and could never change as they would just add the insurance payments to my loan if I stopped paying.

Nothing wrong with that.

They have stated this does not come under ppi and I am not necessarily owed anything back as I had to have insurance.

Correct on both counts. Life assurance is life assurance. PPI is PPI. Car insurance is car insurance. House insurance is House insurance. etc etc
Plus, if you had to have it then you had to have it. So, not mis-sold.

My argument was that 1. The bank made me take out this particular insurance, they made it clear I couldn't use any other insurance.

They are not required to tell you that you can buy it elsewhere. From a point in the 2000s they could no longer tell you that you had to buy it from them (it was allowed before then). However, they have never been required to tell you explicitly that you can buy elsewhere.
So, that is not a valid complaint reason.

2. when I wanted to change they said no or they would add the money to my loan.

Depends on when this was. If it was before mid 2000s then they were allowed to do that. If after, they were not.

3. It turned out this insurance was not specifically for a business account but could be given to a family member on death and so would not pay off the loan which is not what I thought I was buying.

On death ,the life assurance would be paid to the policy owner (so if it was you as single life, single owner it would be paid to your estate). If it was in trust, it would be paid to a named beneficiary. If it was joint life, joint owner, then it would be paid to the other owner. It does not get paid to a random family member.

Do I have a case or are they right and this insurance does not come under ppi or miss-selling?

As it is not PPI, it cant be mis-sold PPI.
Only number 2 in your list of complaints has potential but its unlikely any evidence exists to support your allegation that you enquired years later about buying elsewhere and were told wrong, then you are not likely to succeed in a complaint. Plus, it would only apply from that point and wouldnt be a mis-sale as that applies to point of sale.